The bond market has sold off this morning due to some US jobs data that surprised to the upside. While the jobs report is poor in isolation, the private sector is showing signs of life that are giving the market the courage to believe that a double-dip recession is not a foregone conclusion.
Highlights include:
- Job losses of 54,000 were fewer than the expected 105,000 losses
- The private sector added 67,000 jobs, more than the 40,000 that were expected
- The July numbers for the above were also revised to the upside
Surprisingly, Manufacturing Payrolls contracted by 27,000 which is not consistent with the bullish ISM numbers that sparked this whole sell off mid-week.
Other employment survey stats include a rise in the Unemployment Rate to 9.6% from 9.5%, and hourly earnings modestly exceeded mild expectations.
Looking ahead to the next week:
Canada: Building Permits, Bank of Canada policy announcement (Wednesday); Housing Starts, Trade Balance (Thursday); Employment Report (Friday)
US: Fed Beige Book, Consumer Credit (Wednesday); Trade Balance (Thursday); Wholesale Trade (Friday).