Commodity Risk Assets Hit Bullish Note

The monthly jobs report from Canada last week saw the unemployment rate tick higher than expected to 7.10%, up from 7.00% previously. This figure starkly contrasted with forecasts, missing estimates expecting the Canadian unemployment rate to decline to 6.90% over the month. On the monthly employment change, the Canadian economy added 12,100 new jobs, outperforming the median estimates of 10,500. The economy on the whole continues to add a stable and sustainable number of jobs despite reports of layoffs from the energy patch on account of falling crude oil prices. The gains in WTI has helped the Canadian dollar to also gain against the Greenback with any protracted rally in crude oil benchmarks anticipated to add to the tailwinds lifting the Loonie. The USDCAD currency pair fell -1.56% for the week, breaking below the 1.30 psychological round number support level.

US equity benchmarks, which came under strong pressure few short weeks ago, managed to continue recovering with the S&P 500 and Dow Jones up an average of 3.00%. The gains in stocks come after the downturn in the commodity markets saw many energy companies market capitalization shrink in value alongside the Volkswagen scandal which dragged down the automakers in general. The equity markets gained largely thanks to dovish FOMC meeting minutes released last week. As was expected, the Federal Reserve is still strongly concerned by the lack of inflation, in-line with the sentiments expressed by most central bankers in advanced economies. The gains in the equity markets come as the quarterly earnings are likely to take center stage in the coming weeks. Bellwether miner Alcoa has already given pause for concern after posting a substantial slide in revenues.