Canada recorded its first employment rise of the year in March, up 14k. This followed a combined fall of 109k in January and February.<\/p>\n
The unemployment rate held at 6.7% in March. It was 6.5% in January, 6.8% in December, and 7.1% at its peak in September 2025.<\/p>\n
Over the past six months, Canada\u2019s labour force fell by 39k while employment rose by 42k. The lower unemployment rate since September has also reflected slower labour force growth, not just hiring.<\/p>\n
The softer labour force growth is linked to stalled population growth and an ageing population. It was not attributed to people stopping job searches.<\/p>\n
The wider economic growth backdrop continues to face headwinds. The report expects per-person growth and labour conditions to improve gradually through 2026.<\/p>\n
The recent Canadian labour data suggests a market that is stabilizing rather than accelerating, which should temper any aggressive bullish positioning. While the unemployment rate has fallen from its peak of 7.1% last September, the underlying details point to a fragile balance. This stabilization implies that the Bank of Canada will likely remain on hold, limiting the potential for significant interest rate-driven moves in the near term.<\/p>\n
This cautious outlook from the central bank is reinforced by the latest inflation figures. We saw from Statistics Canada’s March report that the Consumer Price Index is sitting at 2.8%, which is still meaningfully above the Bank\u2019s 2% target. For derivatives traders, this combination of slow growth and persistent inflation creates a narrow path for monetary policy, making strategies that profit from low volatility, such as selling strangles on bond futures, look attractive.<\/p>\n
The economic headwinds mentioned are very real, as we saw that preliminary first-quarter GDP for 2026 grew by just 0.9% on an annualized basis. This sluggish performance, which is negative when considering population growth, suggests a cap on corporate earnings and equity market upside. Therefore, using options to establish covered calls or bear call spreads on the S&P\/TSX 60 Index could be a prudent way to generate income while acknowledging this limited potential.<\/p>\n
The fact that our lower unemployment rate is partly due to a shrinking labour force, not just strong hiring, is a critical point of weakness. This will likely keep the Canadian dollar contained against its US counterpart, especially as recent US data has shown more resilience. We expect the USD\/CAD exchange rate to remain range-bound, making options strategies that bet on it staying between 1.36 and 1.39 a viable approach for the coming weeks.<\/p>\n
This environment feels very similar to the slow, grinding recovery we experienced following the 2015 oil price shock. During that period, betting on major breakouts was a losing strategy, whereas positioning for sideways or choppy markets paid off. We should therefore be skeptical of any sharp market rallies and instead focus on strategies that benefit from this expected gradual improvement.<\/p>\n","protected":false},"excerpt":{"rendered":"
Canada\u2019s employment rose 14k in March; unemployment held 6.7% amid slowing labour force growth.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-44661","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=44661"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44661\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=44661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=44661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=44661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}