The USD/CAD tumbled after the mix of data, where Canada’s employment report was much better than expected, as was the trade report, where an expected widening of the deficit turned into a monthly surplus. USD/CAD currency pair fell from near 1.3255 to 1.3183 lows, levels last seen on December 14. Oil prices remain CAD supportive, with WTI trading in narrow ranges over $54/bbl.

Treasury yields rebounded from lows in the wake of the damp U.S. headline payrolls print, which was offset by the net 19k upward revision the two months prior, putting it dead-on the 175k median forecast. Widening of the trade gap was also a predictable result of the firm dollar. The 2-year yield reversed from 1.16% lows to 1.19%; the 5-year from 1.826% to clear 1.88%; the 10-year from 2.33% to 2.38%.

U.S. December nonfarm payrolls rose a modest 156k, compared to the 180K expected, after an upwardly revised 204k gain in November and a downwardly bump in October to a 135k increase.The net October, November revision was 19k. The unemployment rate ticked up to 4.72% from 4.65% which was revised from 4.640%. The labor force jumped 184k versus the prior -187k, while household employment edged up 63k from 146k in November. Average hourly earnings surged 0.4% versus -0.1%. As for details, private payrolls were up 144k versus ADP’s 153k, with the goods producing sector adding 12, with manufacturing up 17k, while construction dipped 3k. The service sector added 132k jobs, with education climbing 70, with government jobs up 12, while temporary help dropped 16k.

Canada posted a much better number than the U.S. with employment surging 53.7k in December, contrary to expectations that the recent run of sizable gains would end with expectations of -2.5k. The 10.7k gain in November was not revised. Full time employment grew 81.3k after an 8.7k decline while part time jobs fell 27.6k following a 19.4k gain. The unemployment rate ticked higher to 6.9%, as expected (median 6.9%) from 6.8% in November. The participation rate rose to 65.8 from 65.6.

Canada’s trade balance shifted to a $0.5 billion surplus in November, contrary to expectations from a revised -$1.0 billion deficit in October. Exports surged 4.3%, driven by shipments of metal and non-metallic mineral products and a record dollar value of exports to nations other than the U.S. But Statistics Canada notes that export strength was widespread, and does not single out any distortion or one-time factors. Imports grew 0.7% in November, lifted by energy products.

U.S. November trade deficit widened to -$45.2 billion, from a revised $42.4 billion in October which was revised from -$42.6 billion. Exports dipped 0.2% following a 1.8% October drop. Imports were up 1.1% from 1.2% previously. Excluding petroleum, the trade deficit was -$39.2 billion versus -$36.7 billion which was revised from -$36.8 billion. The real goods trade balance was -$63.6 billion from the prior -$60.3 billion, with real exports sliding 0.9% versus -3.0% previously which revised from -2.9%, while real imports were up 1.2% from 1.4%. The balance with China was -$30.5 billion from -$31.1 billion, while it was -$2.7 billion from -$1.3 billion with Canada which was revised from -$1.3 billion.

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The USD/CAD tumbled after the mix of data, where Canada's employment report was much better than expected, as was the trade report, where an expected widening of the deficit turned into a monthly surplus. USD/CAD currency pair fell from near 1.3255 to 1.3183 lows, levels last seen on December...