Tomorrow’s Canadian jobs report is expected to feature modest employment growth amidst a meager increase in the rate of joblessness. April’s payroll rosters are projected to have risen by 2,500 while the unemployment rate ticks north to 6.8%, compared to March’s 32,600 reduction and 6.7% level. Considering the light amount of headcount additions expected at just 2,500, the path to a 6.5% unemployment rate is especially narrow, requiring a 0.2% month-over-month (m/m) decline. Meanwhile, an increase to 7% is also difficult to envision, requiring a 0.3% m/m climb. In consideration of the aforementioned, I like a combination trade of buying the “Yes” answer to the question “Will Canada’s Unemployment Rate exceed 6.5% in April 2025?” which costs $0.96 and the “No” answer at the 6.9% threshold for $0.92, resulting in a total of $1.88. The trade delivers $2.00 back to the investor on a number as low as 6.6% or as high as 6.9%.
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Note: Prices are highest bids as of the morning of May 8, 2025.
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