SocGen’s Juckes Says Loonie Looks Cheap After Big Jobs Gain
(Bloomberg) -- The loonie should get a further lift from a tight jobs market and a hawkish central bank, Societe Generale strategist Kit Juckes said after Canada reported a record year for employment gains.
“In all reality, the Bank of Canada is likely to hike rates by more than the Fed this year,” Juckes said Friday in an interview on BNN Bloomberg Television. “It looks like a tight labor market. It’s good if you’re looking for a wage rise, and it’s probably going to stay that way for a while.”
Employment rose by 54,700 last month, Statistics Canada said Friday, more than double the number economists expected. Full-time jobs surged by 123,000, with many part-time workers shifting to more permanent roles.
The loonie jumped as high as C$1.2642 per U.S. dollar after the report. That’s still close to where it was a year ago, which is surprising given the strength in commodities, Juckes said.
“The oil price is higher, the interest rate curve is higher, there’s more priced in in terms of rate hikes ahead, and the economy’s obviously in much better shape,” he said.
Canada saw the creation of 886,000 new jobs last year, a record. The unemployment rate was 5.9% in December; it was 5.7% before the Covid-19 pandemic hit.
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