Market Wrap – Stocks Recover

During the US session the main focus was US equity markets as they continued to build on recent gains as the Nasdaq100 and the S&P500 posted solid intraday gains.

In the foreign exchange market the euro currency held onto the gains of yesterday, following the shock weekly jobs number from the United States economy.

The Canadian dollar showed a muted reaction during the US session after the Canadian economy shed 17,300 jobs in May of 2023, the first decline in nine months, and compared to forecasts of a 23,200 rise.

The number of employees held steady in the private and public sector, while there was a decline in the number of self-employed workers, while Employment fell by 77,000 for youth aged 15 to 24, offsetting a 63,000 increase among people aged 25 to 54.

There were fewer people employed in business, building and other support services, as well in professional, scientific and technical services while increases were seen in manufacturing (13K) and utilities.

Notably, Employment growth has moderated in recent months and monthly increases averaged 33,000 from February to April, after strong gains totalling 326,000 from September 2022 to January 2023.

Data today also showed that the unemployment rate in Canada rose to 5.2% in May of 2023 after remaining at 5% for the five previous months, above market estimates of 5.1% to mark the first monthly increase in the unemployment rate since August 2022.

The data suggested that the Canadian labour market is starting to give in to higher interest rate from the BoC after remaining stubbornly tight for a long period, as unemployment rose by 34,800 individuals to 1,058,200.

Joblessness was notably higher among people aged 55 and older (+0.2pp to 4.1%). Average hourly earnings for permanent employees in Canada increased by 5.1% yoy to $34.24 in May 2023, slightly up from the 5.2% growth in the previous month.