Launch Pad

While the numbers may be stale, investors are taking comfort in the latest U.S. jobs numbers, after it was reported that job growth climbed in September, with nonfarm payrolls rising by 119,000 after a prior-month decline. While the unemployment rate edged up to 4.4%, the participation rate also climbed, signaling a stabilizing jobs market. Jobless claims fell to 220,000 last week, below economists’ expectations, suggesting employers are still reluctant to cut staff despite uncertainty. 

Santa Powell is unlikely to gift a cut in time for the holidays. The Bureau of Labor Statistics announced they will not publish an October jobs report. The agency said that October’s household survey, which determines key metrics like the unemployment rate, couldn’t be collected during the government shutdown and cannot be reconstructed retroactively. Instead, October’s payroll data will be folded into the November employment report, now scheduled for Dec. 16. This will pose a problem for the Fed as their next policy meeting is on December 10th, meaning they will be flying (at least partially) blind. The shutdown-related disruptions also mean the September JOLTS report has been cancelled, with September and October data set to be released together on Dec. 9, while the timing of the October CPI report remains uncertain. The delay, combined with recent hawkish Fed commentary, has reduced the odds of another rate cut this year to less than 30%. 

Fed officials were divided on where rates should be, according to minutes from the last FOMC meeting with discussions centred around whether inflation or unemployment poses a greater risk to the economy. Several policymakers opposed October’s rate cut and leaned against another reduction in December, while others said a December cut could be appropriate. Despite the divide, the committee approved a second consecutive 25bps cut, with two dissents, and the cherry on top from Powell who emphasized that another cut is not guaranteed. While the pace of cuts remained contentious, officials agreed to end the drawdown of its balance sheet earlier than expected and expressed interest in shifting holdings from longer-dated bonds to Treasury bills. The minutes noted a larger allocation to T-bills would give the Fed more flexibility to manage market liquidity and support policy implementation without raising reserve levels. 

Canada–U.S. trade talks could resume, according to Pete Hoekstra, the sometimes combative, always opinionated U.S. ambassador to Canada. He said the two countries still have a path to a tariff reduction deal despite last month’s blowup, when Trump abruptly stopped negotiations after an Ontario ad that used Ronald Reagan’s words to criticize tariffs, was aired. Hoekstra said talks had been progressing until then and expects them to restart, though getting there will not be easy. Hoekstra also said that Canada should accept that the era of duty-free trade is over, pointing to the baseline tariff the U.S. maintained in its recent agreement with the UK. The stakes are far higher for Canada though, given our country’s deep economic ties with the US. Canada exported over $400 billion to its neighbour last year and remains the largest buyer of U.S. goods. 

Crypto investors rushed to the exits earlier this week, withdrawing about $523 million from BlackRock’s iShares Bitcoin Trust on Tuesday, its largest single-day outflow since launch. The selling came as bitcoin fell below $90,000, its weakest level in seven months. The sudden drop is a stark reminder of how fast the market can shift, with Bitcoin hitting a record high just last month. The correction has prompted investors to rotate toward safer assets like gold, raising doubts about bitcoin’s role as a hedge. 

Take me to the Azores. Canadians may be skipping U.S. trips, but airlines like WestJet is using the shift to widen its reach. The country’s second-largest airline is adding new routes from Toronto to Medellín, the Azores and Cardiff. It’s also launching flights from Halifax to Lisbon, Madrid and Copenhagen, taking advantage of Canada’s east-coast geography, where some European trips are shorter than domestic ones. CEO Alexis von Hoensbroech says softer U.S. demand and a growing longer-range fleet are opening room for this shift, backed by a major Boeing order and a broader strategy under owner Onex to tilt the business toward western Canada and long-haul leisure trips. Happy travels. 


Diversion: Old toy, new tricks 

Industrial metals including copper, aluminum and zinc are higher following news that Beijing is considering measures to turn around China’s struggling property market, after a years-long slump that’s dented commodities demand. A number of options from mortgage subsidies to tax rebates and lower transaction costs are being considered by policymakers, according to people familiar with the matter. The poor state of China’s housing market has dented construction activity and weighed on domestic metals demand, though other sectors from new-energy products to power-grid investments have picked up some of the slack. Zinc led most metals higher on the LME, gaining as much as 1.2%, while aluminum was 0.4% higher and copper rose 0.5%.  

The U.S. trade deficit narrowed in August to $59.6 billion, which is an almost 24% improvement, after Trump’s tariffs began to kick in. The tariffs triggered the biggest drop in imports in four months while exports edged up slightly. The decline was driven mainly by a fall in gold imports after tariffs on Switzerland rose, although capital goods imports, like computer accessories and teleco equipment also weakened. The data, delayed due to a government shutdown, highlights just how volatile trade has been over the last few months, as companies previously rushed to import goods ahead of the tariff changes. Adjusted for inflation, the trade deficit fell to its smallest level since late 2023, adding a potential boost to third-quarter GDP forecasts.