07:43 AM EST, 12/09/2024 (MT Newswires) -- November's Labour Force Survey (LFS) released on Friday was a bit of a mixed bag, but Bank of Montreal (BMO) said that these are the headlines: jobs jumped 50,500, about twice the size of the consensus call; growth in average hourly wages took a big step down from 4.9% year over year to 4.1%; the unemployment rate rose three tenths to 6.8%.

The latter figure grabbed the most headlines among the surprises, and for good reason -- the jobless rate isn't just the highest of the cycle, it's the highest since 2017 excluding the COVID-19 pandemic, noted the bank.

That's why market expectations shifted from split odds on a 25bps-or-50bps move from the Bank of Canada to a more forceful shift towards a second consecutive 50bps move, stated BMO.

For the same reason above, the bank changed its call for the BoC to cut by 50bps this Wednesday. However, BMO pointed out there are plenty of risks to these larger moves. Among the biggest ones are the increasing divergence with the United States Federal Reserve -- and further depreciation in the Canadian dollar (CAD or loonie) -- as well as the possibility of reigniting the housing market.

Unsurprisingly, the loonie stumbled again on Friday though it has recovered some losses and is currently trading around Monday's highs of $1.413, added the bank.

Other than the BoC announcement, there are few notable data releases this week -- and they're all on the back end. On Thursday, Q3 National Balance Sheet and Finance Flow Accounts are expected to show another improvement in the household debt-to-income ratio, as growth in mortgage loans remains muted amid still-elevated rates. BMO will have an eye on the debt service ratio, which is near record highs as mortgage resets continue to add upward pressure. Meantime, household assets likely got a boost from rising equity markets, which offset a modest decline in home prices.

Rounding out the data docket for Canada will be October building permits on Thursday. Q3 capacity utilization, and October manufacturing sales, wholesale trade, and new motor vehicle sales -- all on Friday.