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    Spain’s industrial output drops to 1.2% year-on-year from 1.7%

    by VT Markets
    /
    Dec 5, 2025
    Canada’s unemployment rate is expected to rise to 7% in November, according to forecasts made before the Bank of Canada’s rate decision. The upcoming Labour Force Survey from Statistics Canada, due on Friday, is predicted to show this increase. In October, employment numbers showed positive growth, but forecasts for November suggest no such gains. This situation may influence the Bank of Canada’s future monetary policy as the job market shows signs of weakness. Today’s jobs report confirmed concerns, revealing an increase in unemployment to 7.1% for November. This result is slightly worse than the expected 7.0%, with the economy losing 5,000 jobs. These indicators of a slowing job market are putting significant pressure on the Bank of Canada ahead of its decision next week. With inflation dropping to 2.3% last month, there is a clear indication for the Bank to consider easing its policy. The derivatives market is reacting, with overnight index swaps reflecting over a 60% chance of a 25 basis point rate cut at the meeting on December 10. This is a notable shift from just a few weeks ago when the market anticipated no changes. We believe the Canadian dollar is at risk, making long positions in USD/CAD appealing. Traders might think about buying call options on USD/CAD to benefit from a potential rise while minimizing risks. The 1.4000 level, a psychological barrier previously tested in early 2025, now appears to be a realistic target if the Bank indicates a dovish shift. For those interested in trading interest rates, going long on Canadian government bond futures could be a straightforward way to capitalize on expected lower rates. A similar situation occurred in spring 2025, leading to a significant rally in bonds when the first rate cut was announced. The rising implied volatility on these contracts suggests that strategies like bull call spreads may be wise to help manage costs.

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