Statistics Canada reported that employment rose by 75,100 in July, far surpassing market expectations of a 16,500 increase. The unemployment rate improved to 6.4%, marking the third consecutive month of improvement and the lowest level in two years since July 2024. Average hourly wages for permanent employees rose 3.0% year-on-year, slowing from a 3.7% gain the previous month and posting the smallest increase since February 2022. The Bank of Canada held its policy rate at 2.25%, and financial markets expect no rate hikes this year.
Strong jobs data may lead to higher yields as rate cut expectations diminish.
Strong jobs report reduces likelihood of rate cuts, supporting higher policy rate.
