BOCs Macklem is on the wires saying:
- there is scope to cool labor market without causing the kind of unemployment surge we have typically experienced a recession's
- suggest unemployment rate will rise somewhat if the job vacancy returns to more normal levels, but it would not be high unemployment by historical standards
- slightly negative growth is possible over the next few quarters
- that's not a severe recession, but it is a significantly slowing of the economy
- right now we need the economy to slow down
- to reach 2% inflation target we need to rebalance labor market and that will be a difficult adjustment
- in recent months we are seeing additional signs that exceptionally tight labor market conditions have started to ease, wage growth looks to be plateauing
- much of the inflation Canada is experiencing reflects domestic factors, namely excess demand in economy
- Will be watching broad set of indicators to gauge health of labor market
- we will be looking beyond headline unemployment numbers to gauge how different groups and labor market are adjusting
- it will be hard to know when we have reached maximum sustainable employment since it is not directly measurable
Looking at the 4 hour chart of the USDCAD, the price has moved sharply lower and broke below the 50% midpoint of the move up from the August low. That level comes in at 1.33520. The low price reached 1.33325. The price is at her trading at 1.3375. The low price from just 2 days ago reached 1.33867 before bouncing higher. The bounce off of the low today moved up to 1.33789 about 8 pips from that low from Tuesday. Watch the 1.33867 there is a close risk level.
USDCAD tests the 50% retracement