Statistics Canada is set to release its Labour Force Survey soon. The Unemployment Rate is projected to rise to 7% in November. Meanwhile, the Employment Change is anticipated to remain unchanged. This follows an observed increase in employment figures in October.

Markets Brace For Upcoming Data

Markets are preparing for these outcomes. The data comes ahead of the Bank of Canada’s upcoming rate decision. With today’s labour report expected to show unemployment rising to 7%, we see this as a critical test for the Bank of Canada’s path. This data, released just ahead of the BoC’s final rate decision of the year on December 10th, could confirm the economic slowdown we’ve been tracking. The market is currently pricing in a nearly 40% chance of a rate cut, a significant jump from just 15% a month ago. A weaker-than-expected number, perhaps with unemployment hitting 7.2% and a net job loss, would solidify bets on a rate cut next week. Traders should consider buying call options on CORRA futures to take advantage of falling interest rate expectations. We saw a similar situation in the third quarter of 2025 when lower inflation data boosted the bond market. Conversely, any surprise strength, like the unexpected 17,500 job gain we saw back in October 2025, would challenge the optimistic view on interest rates. This could cause a sharp reversal, making short-term interest rate futures fall in price as the chances of a rate cut decrease. A contrasting strategy would be to purchase put options on these futures, betting the BoC will maintain its current rate.

Impact On The Canadian Dollar

This situation significantly influences the Canadian dollar, which has been struggling to stay above $0.72 USD. A weak jobs report would likely push the USD/CAD pair towards the 1.4000 resistance level we haven’t seen since 2024. Buying near-term USD/CAD call options offers a direct way to bet on further weakness in the Canadian dollar. Given the uncertain nature of this event, we expect increased volatility regardless of the outcome. The expected volatility on one-month CAD options has already reached a three-month high of 8.5%. Traders not wanting to bet on a specific direction could use straddles on currency ETFs to profit from a significant price movement either way. Looking into the coming weeks, this jobs report will set the tone for positioning into the January 2026 meeting. A confirmed downturn in the labour market would lead us to shift our expectations for future interest rate decisions. We would look to options with February 2026 expiries to capture the evolving policy trend.

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