Forex Trading Library

Commodity Jobs Special: NZ & Canada

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Two major commodity currency countries will be publishing their employment data. And that routinely shakes up the market a bit!

New Zealand is especially interesting since they just finished signing a new trade agreement with their largest trade partner, China.

Canada has also managed to stay out of the recent market uncertainty. And with their Federal elections in the rearview mirror, they might be the new popular commodity currency.

With the race to the bottom in monetary policy rates, it’s been increasingly hard for institutional investors to find profits. The search for yields has led investors to turn towards more exotic instruments and away from traditional risky assets.

That has had a cost for New Zealand, which has seen capital flight recently, putting pressure on employment. Jobs data is usually one of the last indicators to suffer the effects of economic stress. This is because employers will usually try to adjust labor costs in other ways before they start terminating employees.

Changes in employment data are better viewed as confirmation of an observed trend, which can have a stronger impact on the market. And central banks are increasingly turning towards employment data to guide policy.

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New Zealand

First up, the Kiwis have suffered less than other countries at the hands of the ongoing global uncertainty.

This has frustrated regulators and policymakers who would like to blame external factors for the economy. The New Zealand economy has been among the worst-performing of the major trading currencies! This is despite them being among the most aggressive in taking policy action.

New Zealand primarily exports consumer goods to China, a market that has remained rather resilient. Also, so far this year, they have been able to take advantage of higher than usual dairy prices.

As a matter of fact, later today we expect the GDT price index to increase another 1.9%.

The Jobs

As for employment, the figure the market cares about the most is the quarterly Employment Change. Expectations are for this to increase by 0.3% compared to 0.8% in the prior quarter.

Mind you, this is in the middle of the winter there, when the primary economic sectors of the islands are at a low ebb.

We can expect the unemployment rate to tick up to 4.0% from 3.9% in the prior quarter. In terms of inflationary pressures, though, projections indicate that labor costs could slow to just 0.2% growth. 

This would be a warning sign about stagnating salaries. And it would signify potential weakness for the NZD.


Canada’s employment figures are usually reported along with the US NFP, and they are one week delayed this time.

Since they won’t be overshadowed this time, we might get a stronger reaction in the market than usual.

The market typically reacts to the Employment Change figure, which is projected to come in at 40.5K jobs created, compared to 53.7K jobs created in September.

It’s not unusual to get a bit of a bump in the employment figures in the months ahead of a federal election as candidates take on temporary staff for their campaign.

As for the unemployment rate, that’s expected to tick up slightly to 5.6% from 5.5%, in keeping of the 5.4-5.8% range it’s been bouncing around in for most of the year. We wouldn’t expect a strong reaction in the CAD unless the employment rate unexpectedly moved beyond that range.

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