Canada publishes its employment report for October on Friday, November 2nd, at 13:30 GMT. This is the first such report since Canada, and the US successfully concluded trade talks and announced the USMCA which supplants NAFTA. The accord lifts a massive cloud above prospects for the economy.

Back in September, the nation with the second-largest land mass in the world gained 63,300 positions. However, the composition of jobs, with many part-time positions increased, clouded the publication. Nevertheless, Canada enjoyed a drop in the unemployment rate to 5.9% with a healthy participation rate of 65.4%.

Why CAD could rise on the news

Expectations for October are modest: an increase of only 10,000 jobs with the jobless rate staying at 5.9%. The low expectations leave room for an upside. Any small beat could lift the loonie.

In previous episodes of substantial increases in part-time jobs, the following month was followed by a rise in full-time ones. The see-saw between full-time and part-time positions is a well-known phenomenon.

Moreover, the central bank expressed optimism in recent days. Deputy Governor Carolyn Wilkins said it is an excellent time to raise rates. The hawkish approach means that BOC will not be easily deterred from hiking.

The BOC has recently removed the word “gradual” referring to rate hikes and leaves room to react to incoming data. A significant increase in jobs opens the door to a move already in December, but an interest rate hike is more likely in early 2019.

The only considerable unknown is wages. The change in salaries has a growing impact on the Canadian Dollar. After reaching a peak of 3.9% earlier this year, earnings growth decelerated to 2.2% in September. Also here, there is room for optimism that a correction will follow the downfall.