USD/CAD: Unemployment rate is expected at 6.7% vs. 6.6% in January – BBH

Canada’s February labor force report will help shape rate expectations ahead of next week’s Bank of Canada (BOC) policy setting meeting, BBH FX analysts report. 

Liberal Party to choose a successor to Prime Minister Justin Trudeau

"Consensus sees a 20k rise in jobs vs. 76k in January, while the unemployment rate is expected at 6.7% vs. 6.6% in January. Overall, the labor market remains soft and firms’ hiring intentions are muted." 

"Markets price-in 80% odds of a 25bps BOC policy rate cut at the March 12 meeting given the drag to growth from tariffs uncertainty. Still, we expect the BoC to pause easing next week because core inflation (average of trim and median CPI) is tracking above the BOC’s Q1 projection of 2.5%."

"On Sunday, Liberal Party members will choose a successor to Prime Minister Justin Trudeau. The new leader is expected to face a vote of no confidence once parliament reopens on March 24 which will trigger snap federal elections."