Market Watch: April 9

Canadian growth was also upgraded for 2021 with projections increasing to 4.7 per cent from 3.6 per cent.

A virtual meeting of the world’s top economic officials from the G20 got underway this week to discuss the shape of the post-pandemic economy. U.S. Fed Chairman Powell addressed the gathering Thursday saying sluggish progress on COVID-19 vaccination outside the U.S. is a key threat to the global economy. Also, on the virtual meeting agenda is a drive to reach a consensus on minimum global corporate tax rates and how to levy the profits of multinational tech giants.

On the U.S. 10-year Treasury watch, yields continued to drop this week from recent highs – trading under 1.7 per cent – stirring a revival in technology stock performance this week. Meantime, the Fed released minutes from its March monetary policy meeting on Wednesday. Most of the 18 central bank officials are expecting interest rates to remain near zero through 2023 with no expressed readiness to tighten monetary policy until the economy further recovers.

In China, the country is launching a digital currency – the world’s first – that will be issued by the central bank. It’s expected to give Beijing new tools to monitor its economy and people. The digital yuan is also being positioned for international use where the U.S. dollar has reigned since WWII.

In geopolitical news, Western and Iranian officials kicked off talks in Vienna to revive the 2015 nuclear accord.

U.S. and Canadian markets were higher on the back of positive economic data points

North American stock markets started the second quarter on strong footing following a better-than-expected U.S. jobs report released Good Friday when markets were closed. For the four days covered in this report, the Dow rose 350 pts. to close at 33,503, the S&P 500 added 78 pts. to finish at 4,097 and the Nasdaq jumped 349 pts. to end at 13,829. The TSX ended up 238 pts. to end Thursday’s session at 19,228.

Strategy

Canadian recovery well on track with a second consecutive knockout jobs print

The Canadian labour market recovery kicked into high gear in March, blowing past expectations for a second consecutive month as the country continues its strong pace of recovery. The economy added 303,100 jobs in March, shooting passed consensus of 100,000 and building on last months 259,200 gain.

The unemployment rate fell to 7.5 per cent, down from 8.2 per cent last month, while the participation rate increase by 0.4 percentage points to 65.2 per cent. The gain was fairly evenly split between full-time and part-time employment, 175,000 vs. 127,800, and hours worked rose 2.0 per cent.

Still, compared with February 2020, there were 296,000 (-1.5 per cent) fewer people employed in March 2021, and 247,000 (+30.4 per cent) more people worked less than half of their usual hours. Most of the pick-up in hiring was in sectors that suffered lockdowns in December and January, and were allowed to reopen in February and March.

Retail trade drove most of the gains, with employment rising by 95,000 last month as provinces eased restrictions. Notably, the growth observed in Canada’s largest cities was fairly muted, more than 200,000 jobs came from outside of Montreal, Toronto, and Vancouver.

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Market Watch: April 9

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