Morning Minutes

A Big Miss for the US and a Big Beat For Canada In Employment Growth

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Bulls and bears have been battling this morning over how to react over a shockingly weak US nonfarm payrolls report. In the first few minutes of trading after the 8:30 am EDT data release time, the three main US index futures contracts went from being up 0.2%, to being down 0.2%, to being up 0.3% on average. Quite the roller coaster so far.  

Investors have responded negatively so far to today’s very split North American employment reports. US nonfarm payrolls missed expectations badly (194K vs street 500K) although an upward revision to the August report (to 366K from previous 235K) offset that a bit. Wage inflation pressures continue to increase (4.6% as expected vs previous 4.3%). In Canada, job growth in September accelerated and crushed expectations (157K vs street 60K and previous 90K).

Overseas market action has been mixed today North American employment reports. Asia Pacific markets continued to rebound with the Nikkei gaining 1.3% and the Hang Seng rising 0.5%. European indices are mixed with the FTSE flat, the Dax down 0.1% and the CAC down 0.3%.  

Energy prices are on the rise again today with WTI crude oil up 0.6% trading near $78.75/bbl and natural gas up 1.4% trading near $5.75/mmbtu. Platinum is up 2.0% in what could be a positive sign for the auto sector, while copper is down 0.1% and gold is up 0.2%.  

Canadian housing starts (previous 260K) are due at 9:15 am EDT. Yesterday Canadian Ivey PMI crushed expectations (70.4 vs street 60.7 and previous 66.0), perhaps reflecting the positive impact of rising energy prices for the oil patch and the broader economy.  

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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