Insights 
VT 
The Canadian jobs market showed resilience in April 2025 as employment figures surpassed expectations with a rise of 7.4K jobs compared to the forecasted 2.5K. However, much of this increase came from 37K temporary public administration jobs added for election purposes, leading to concerns about sustainability. The unemployment rate edged up slightly from 6.7% to 6.9%.
In other economic updates, the US experienced a notable rise in the 10-year yield by 1.3 basis points to reach 4.38%. The S&P 500 index saw a marginal decrease of 0.1%, while gold prices climbed by $22 to $3328. The oil market saw a jump with WTI crude oil increasing by $1.02 to settle at $60.98. The GBP gained strength, contrasting with a lag in the CAD due to trade tensions and economic uncertainties.
Federal Reserve Comments
Federal Reserve officials commented on the US economic outlook, predicting slower growth, higher inflation, and increased unemployment. The White House ruled out a unilateral tariff reduction on Chinese imports amidst ongoing US-China trade negotiations. Meanwhile, geopolitical tensions were noted with Iran’s preparations to supply Russia with ballistic missile launchers and multiple explosions reported in Amritsar, India.
While the headline increase in Canadian employment in April may initially suggest strength, the underlying picture tells a more measured story. A closer look reveals that the rise was skewed by a one-off jump in public administration hiring, largely driven by electoral preparations. These temporary roles added a fleeting boost to the data, and without them, the labour market appears to have added very few positions. The move higher in the unemployment rate reinforces that softness. It crept up by 0.2 percentage points, suggesting that more people began looking for work but weren’t absorbed into jobs at a meaningful rate.
From our perspective, the composition of hirings matters far more than the headline. When we strip out this electoral distortion, the labour market appears to be stalling rather than gaining traction. That signals a possible mismatch between labour demand and supply, and that sort of imbalance tends to weigh on productivity expectations. For those viewing Canada’s economic rhythm as linked to domestic consumption strength and real wage performance, this data nudges sentiment slightly negative.
Yield and Market Response
South of the border, there’s a firmer undertone in yields. With the US 10-year rate climbing fractionally, it reflects increasing market expectations for both stickier inflation and more persistent policy restraint. When we look at how equity markets responded, the mild retreat in the S&P doesn’t quite shake confidence—it appears more like rotation than fear. That said, gold’s sharp rally suggests pockets of investors are hedging for policy risk or geopolitical disturbance.
The CAD’s fall can be framed as a mirror of market belief that growth may not carry forward strongly, especially when considered alongside external pressures. The policy conversation in Washington, which leaned openly against Chinese tariff reductions, compounds the anxiety. Any deterioration in US-China relations shoulders wider implications for commodity-dependent exporters, especially those like Canada that benefit indirectly from smoother trade corridors.
Meanwhile, from a volatility standpoint, the movements in crude oil carry weight for short-term positioning. The push above $60 per barrel in WTI marks something of a psychological reset. That move wasn’t driven solely by inventory dynamics—it also carries a headline risk premium tied to instability in key producing regions. With louder rumblings out of Iran and fresh explosions reported in India, markets can no longer brush off geopolitical risk as peripheral. These developments coincide with defensive flows into traditional safe havens, and while we’re not yet seeing panic pricing, there’s a gentle leaning towards protection.
Gilt traders may note the GBP’s upward push as a function not of domestic outperformance, but of broader relative weakness elsewhere. Sterling strength here is less about policy anticipation and more about shifting capital flows searching for perceived safety. For rate-sensitive instruments, this positioning can expose assets to sharp reversals if sentiment realigns around UK growth prospects or BoE forward guidance.
Equity volatility remains modest for now, but with inflation worries lingering and geopolitical clouds darkening, there’s room for a repricing of tail-risk scenarios. We prefer erring on the side of defensive overlays, especially where delta exposure is high or FX sensitivities are embedded in the portfolio. The week ahead offers limited macro catalysts, but open rhetoric from monetary authorities remains an underappreciated risk driver. One off-script remark from a policymaker could open the door to fresh market momentum.
