Sign Up Log in

    In December, Canada’s employment insurance claimants rose 0.4% month on month, slowing from 1.6% previously

    by VT Markets
    /
    Feb 19, 2026
    Canada’s month-to-month change in Employment Insurance (EI) beneficiaries slowed to 0.4% in December, down from 1.6% in the prior month. This suggests the number of people receiving EI benefits is still rising, but at a slower pace than before. No additional details or breakdowns were included in the update.

    Implications For Labor Market Momentum

    The December slowdown in new EI claims is an important signal. It suggests the sharp labor market deterioration seen in Q4 2025 may be easing. That runs against the broader market view that a steep economic downturn was imminent. This also means we should reassess how aggressively the Bank of Canada may cut rates in the months ahead. If conditions are stabilizing, the case for an emergency-style cut weakens. Overnight index swaps that had priced in nearly a 75% chance of a cut by April could start to price in lower odds. Traders may want to reconsider positions that depend on a fast and deep easing cycle. For the Canadian dollar, this is a cautiously positive sign after it fell to around 0.7150 USD late last year. A less dovish central bank could help put a floor under the currency, making short CAD positions less compelling. One potential approach is selling out-of-the-money CAD put options to collect premium, based on the view that the worst of the decline may be over. In equities, this data may also ease the elevated implied volatility that has weighed on the TSX. Canada’s VIX-style measure, which jumped above 21 during the weakest job reports in November 2025, could begin to drift lower.

    Potential Positioning For Lower Volatility

    Positioning for a calmer market using strategies that benefit from falling volatility—such as selling straddles on major index ETFs—could be a sensible move. Create your live VT Markets account and start trading now.

    here to set up a live account on VT Markets now

    In This Article

    see more

    Back To Top
    server
    Click Click Click Click Click
    Follow us on

    Hello there 👋

    How can I help you?

    Chat with our team instantly

    Live Chat

    Start a live conversation through...

    • Telegram
      hold On hold
    • Coming Soon...

    Hello there 👋

    How can I help you?

    telegram

    Scan the QR code with your smartphone to start a chat with us, or click here.

    Don’t have the Telegram App or Desktop installed? Use Web Telegram instead.

    QR code