Last week there were new job market reports in both Canada and the US. In Canada, the number of new jobs was 44 000, of which 32 000 was in the public sector, likely people hired to help with the federal election. The private economy employment increased by 12 000, in line with expectations. Employment in Alberta fell (those low oil prices) while employment in Ontario and BC increased.
The US job market report was, potentially, of more consequence. This is because everyone is speculating whether the US central bank will raise interest rates in December. US non-farm employment increased by almost 300 000, the highest amount since last December. Unemployment fell to 5%.
As the FED has a dual mandate (it wants low inflation and low unemployment), trades expect the short-term interest rates to be raised in December. This means other interest rates increase right away, and prices of bonds fall.
What are the consequences? As interest rates in the US rise, the US dollar appreciates (this is the interest-rate parity). The price of oil in dollars falls since the price is in US dollars and appreciation of the US dollar raises the cost of oil in other currencies.
Note there are a couple of errors in the article.
The first: The euro fell to $1.708 , its lowest since April, and last traded down 1.31 percent at $1.0738 (should be 1.0708 - a big difference)
The second: average hourly earnings rose a respectable 9 cents (I have no idea what this should be)
So you should verify numbers you see, even from respectable sources (this one is from Reuters)..
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