Canada Job Losses, US Midterms Weaken Rate-Hike Odds

Weak Canadian employment data has reduced expectations for another Bank of Canada rate increase: October employment fell by 4,700, unemployment rose to 6.7%, and markets lowered the implied odds of a December hike to about 32% from 40%. The report followed the Bank’s October rate increase and added to concerns about a weakening labor market, though inflation and GDP data and central-bank comments could still affect the December decision. Separately, U.S. prediction-market odds of a Federal Reserve rate increase in December fell to 67% after the midterm elections, while the chance of no change rose to 33%; a hike remained the more likely outcome in those markets.