REPEAT-PREVIEW-Canada seen adding 17,500 jobs in December

(Repeats Dec. 31 Preview without changes)

WHAT: Canadian December employment report

WHEN: Friday Jan. 7, at 7 a.m. (1200 GMT)

REUTERS FORECAST:

(ECONCA: )

Dec F’cast range prior (Nov)

Jobs gain/loss +17.5K -10K to +35K +15.2K

Unemployment rate 7.7 pct 7.6-7.9 pct 7.6 pct

For individual forecasts see: [ID:nECICA]

FACTORS TO WATCH:

Recovery: Fourth-quarter growth has shown a pickup from a
disappointing third quarter, suggesting employers may have been
more ready to hire.

Type of jobs: Private sector payrolls, which fell in
November, may see a rebound in industries such as finance and
insurance. Retailers may see a lift this month because of the
holiday shopping season. Manufacturing jobs may take another
hit from several plant shutdowns and poor weather.

Wages: The average hourly wage of permanent employees,
closely watched by the Bank of Canada for inflation pressures,
may rise slightly from an annualized 2.2 percent gain in
November. Upward pressure on wages could make it harder for the
central bank to keep its key interest rate on hold in an
environment of very low rates and a relatively resilient
domestic economy.

MARKET IMPACT:

Stronger than forecast job numbers would ease concerns of
slower economic growth and support the Canadian dollar
(CAD=D3: ), which is currently holding steady around parity with
the U.S. dollar.

An unexpectedly large decline in hiring would likely
prevent the currency from rising further and support bond
prices as the prospect of another interest rate hike is pushed
further into the future.

Markets are still cautious about future rate hikes and are
pricing in more than a 90 percent chance of steady rates in
January, according to a Reuters calculation of yields on
overnight index swaps. (BOCWATCH: )

Among the 12 Canadian primary dealers — the institutions
that deal directly with the central bank to help it carry out
monetary policy — the majority forecast rate increases in the
second half of the year, with a median prediction for the first
hike in July. [CA/POLL]
(Reporting by Ka Yan Ng; editing by Rob Wilson)

REPEAT-PREVIEW-Canada seen adding 17,500 jobs in December