A 68,300-Job Loss Became a 1.5% Rally Through the Rate Path
Canada lost 68,300 jobs in September, and the S&P/TSX Composite rose 1.48% to 35,664.62 at 4:00 PM ET. The link is the Bank of Canada. According to Reuters swap data, the odds of a hike at the October 28 decision fell to 27% from 40%, while a 25 basis point hike in December stayed priced.
The report was the last jobs reading before that decision, and it showed a second straight monthly decline, after 41,700 jobs lost in August, against a Reuters consensus gain of 9,200. The morning Economy desk had set out the gap between headline and core CPI ahead of this release.
The TSX has stayed below its August 25 close of 36,957.60 through a Bank of Canada hold and a Federal Reserve hike, and the 4:00 PM print on October 9 leaves it 3.5% short.
Daily closes through October 8; the October 9 point is the 4:00 PM ET print. The Bank of Canada held at 2.25% on September 2, and the Federal Reserve raised its range to 3.75% to 4% on September 16.
The week turned on this one session. The index closed October 8 at 35,145.40, down 1.0% on the week from 35,502.70, and stood 0.5% above that October 2 close at 4:00 PM on October 9.
The currency took the other side. USD/CAD rose from about 1.4220 before the release to 1.4299 after the release, according to BigGo Finance, and stood at 1.4264 at 4:00 PM against 1.4224 on Thursday. The Canadian Press reported that the loonie briefly dipped below 70 cents US, its weakest level since early 2025. A holder measuring returns in U.S. dollars gained about 1.2%, not 1.5%.
The TSX Has Been Trading Gold Since August, Not Oil
Since August 25, daily TSX returns have correlated at 0.62 with gold futures, against negative 0.29 with WTI and negative 0.43 with Brent, across 32 sessions (HDQ calculation). Futures settle at different times from the 4:00 PM index close, so the figures are approximate, but the signs hold: the index has moved with gold and against crude.
October 9 fit the pattern. Gold futures rose 1.5% to $4,220.10 at 4:00 PM, while WTI moved from $91.49 to $91.56 and Brent from $104.28 to $104.32. By mid-morning, Reuters reported precious-metal-linked materials up 2.8% and energy up 1.1%.
Indexed to September 8, the TSX stands at 98.7, WTI at 98.4 and gold at 95.1, a near tie for equities and oil that conceals a far stronger daily link between the index and gold.
Daily closes indexed to September 8 equals 100; the October 9 point is the 4:00 PM ET print. Gold and WTI are front-month futures contracts.
The morning Market desk covered the opposite leadership: materials and gold selling off while energy bounced. The jobs report reversed it. A lower rate path supports gold, and gold supports a materials-heavy index. An energy gain of 1.1% on a flat crude price points to a sector moving with the index rather than with oil.
The Hold Is Narrower Than the Rally Implies
Public sector employment fell 70,000 while private sector employment rose 24,000, according to CBC News and ActionForex. The labour force shrank by 53,000 and the participation rate fell to 64.8%, which Statistics Canada attributed largely to an aging population. The unemployment rate rose only 0.1 point, to 6.5%.
Wages point the other way. Average hourly wages for permanent employees rose 2.3% from a year earlier, up from 2.0% in August, and annual inflation was 3% in August against a policy rate of 2.25%. That fits swap pricing that still carries a full 25 basis point hike by December. The market moved the October odds, not the destination.
An index that rises 1.5% on a repriced probability is carrying that probability, not a growth upgrade. The TSX is closed Monday, October 12 for Thanksgiving and reopens Tuesday, October 13, while gold, crude and the currency can trade without it. September U.S. CPI follows on October 14, and the Bank of Canada and the Federal Reserve both decide in the week of October 26. Each can move the 27%.