Corn Highest Since July As US Exports Stay Strong Ahead Of WASDE

Source: Bloomberg Europe

Canada unexpectedly shed jobs for a second month running in August, extending a soggy summer for a labor market that is showing signs of weakness broadening beyond areas directly hit by tariffs and trade worries.

Employers in the country cut a net 65,500 jobs last month, the steepest decline since the start of 2022 when another Covid-19 variant forced widespread lockdowns, Statistics Canada said Friday. That builds on the 40,800 jobs shed in July to leave the unemployment rate 0.2 percentage point higher, at 7.1%.

The bulk of the jobs lost in August were in part-time roles--unlike in the month before, when losses were concentrated among full-time positions--though much of the decline was among adults even as returning students continued to struggle to find work. August also saw a another slump in employment in services jobs not reliant on trade or in the firing line of higher tariffs.

The data bolsters expectations the Bank of Canada will be pushed to resume cutting interest rates as soon as this month, after the economy contracted more sharply than anticipated in the second quarter and with inflation sitting below the central bank's 2% target four months running. And there are some economists now expecting rate cuts may have to be deeper than previously envisaged.

"Economic weakness is broadening and requires monetary action. We need interest rates in a stimulative stance," said Etienne Bordeleau Labrecque, a portfolio manager at Ninepoint Partners, who now expects the bond market to start pricing in a steep half-percentage-point cut in the Bank of Canada's policy rate at its meeting Sept. 17.

The weakness in Canadian employment echoed the deterioration in the U.S. labor market, where fewer jobs were added to the economy than expected and the unemployment rate ticked up 0.1 point, to 4.3%. That likely seals the case for the Federal Reserve to also lower interest rates at its meeting in two weeks, while potentially raising worries for the Bank of Canada about weakening demand in the U.S., by far Canada's largest export market.

When calculated using U.S. Labor Department methodology, Canada's unemployment rate was 0.2 point higher at 6%.

Canada's jobless rate has now risen half a percentage point since January, when there was a jump in employment, and it now sits at its highest level since May 2016, outside of the peak during the pandemic lockdowns in 2020 and 2021. Economists were expecting an August unemployment rate of 7%, and for employment to have steadied with a modest rise of 10,000.

Business and household sentiment remains subdued, even as trade tensions between Canada and its neighbor have eased. The bigger-than-expected step up in the unemployment rate in August came despite the labor force contracting for a second month in a row and with the participation rate--the proportion of working-age Canadians either employed or looking for work--dipping 0.1 point, to 65.1%.

The data also showed the struggle to find work after being laid off is intensifying, with roughly 15% of those who were jobless in July finding work the next month, compared with just over 23% in the same period of 2017 to 2019 before the onset of the pandemic.

There are few signs conditions will improve in the coming months. The Canadian Federation of Small Business's latest monthly survey found little appetite for new staffing, with plans to hire part-time workers remaining negative and with only slightly more employers looking to add full-time roles than those planning to reduce them. At the same time, the federal government has warned of coming job losses in the public sector as it looks to tighten spending even as it promotes big development projects.

The job picture for manufacturers, who have been hit hardest by the Trump administration's trade policies and tariffs, continues to decline. There were 19,200 fewer manufacturing jobs last month, down 1.0% from the month before, and losses since January now sit at roughly 58,000, or 3.1%.

At the same time, employment in professional, scientific and technical-services roles fell by 26,100, a 1.3% pullback from July. That follows a 3.3% drop in jobs in information, culture and recreation positions in July.

There also were fewer jobs in August in transportation and warehousing and in education, which tends to be volatile in the summer months. Among the few bright spots, there was a rise in employment in construction and in restaurants and hotels.

The labor numbers indicate the Bank of Canada is more likely to be concerned about the economy and less about stickiness in core inflation, which faces less immediate threat of heating up from tariffs after Ottawa sharply scaled back the imports from the U.S. that are hit by its retaliatory levies, economists said.

"An undeniably soft August employment report in our view solidifies a resumption of rate cuts by the Bank of Canada this month," said Citi economist Veronica Clark, who expects the central bank will do more than fine-tune its policy rate and will cut 1 percentage point in all to take the rate to 1.75% by early next year. "The unemployment rate rising above 7% clearly suggests demand further undershooting labor supply even with slowing population growth this year."

Source: TradingView

Thailand's parliament was set to choose a new prime minister on Friday, after days of political chaos, in a vote that could be overshadowed by the dramatic departure from the country of its most powerful politician Thaksin Shinawatra.

Polarising billionaire Thaksin, the central figure in a tumultuous two-decade battle for power in Thailand, left on his private jet for Dubai late on Thursday, with his family's ruling party Pheu Thai in disarray.Thaksin's flight out of Thailand came only days ahead of a court ruling next week that could see him jailed.The departure of Thaksin, the driving force behind Pheu Thai, came six days after a court sacked his daughter, Paetongtarn Shinawatra, as prime minister for an ethics violation, triggering a scramble for power and a bold offensive by a renegade party to form its own government.

Pheu Thai, the populist political juggernaut that won five of the past six elections, has fought desperately to thwart the challenge of former alliance partner Bhumjaithai, which has won the backing of the biggest force in parliament with a pledge to call a new election within four months.The turmoil has put Bhumjaithai leader Anutin Charnvirakul in pole position ahead of Friday's vote, where he needs the support of more than half of the lower house to become prime minister.His coalition has 146 lawmakers and with the People's Party opting to stay in the opposition but guaranteeing him its 143 votes, Anutin could comfortably pass the required threshold of 247 votes.

'THE FINAL SHOW'

After a failed attempt to dissolve the house to stymie Anutin, Pheu Thai made another last-ditch attempt to undermine his alliance on Thursday, announcing it would nominate 77-year-old former attorney-general Chaikasem Nitisiri to contest the prime ministerial vote, with a promise to call a snap election immediately if elected.But with the sudden departure of 76-year-old power-broker Thaksin amid a crisis in his once-dominant party, the chances of political unknown Chaikasem succeeding look increasingly slim.In an overnight post on X, Thaksin said he had arrived for a medical checkup in Dubai, where he spent most of his 15 years in self-imposed exile to avoid a jail term for abuse of power and conflicts of interest while he was prime minister from 2001-2006.

He said he would return by Monday.

Thaksin made a vaunted homecoming before cheering crowds in 2023 to serve his eight-year sentence, but on his first night in prison, he was transferred to the VIP wing of a hospital on medical grounds.The tycoon had his sentence commuted to a year by the king and was released on parole after six months in detention. The Supreme Court will decide on Tuesday if his hospital stint counts as time served, if not, it could send him back to jail.Wanwichit Boonprong, a political science lecturer at Rangsit University, said Anutin had outmanoeuvred Thaksin's Pheu Thai by making a pact with the opposition."I'm quite confident that Anutin will be elected as the next prime minister," he said."Pheu Thai's tactics are like the final show," he said. "Pheu Thai has completely closed the curtain."

Source: Reuters

Source: finance.yahoo

Source: Bloomberg Europe

Source: Reuters