TD Says Strong September Jobs Data May Prompt Bank of Canada to Hold Rates Steady

06:58 AM EDT, 10/14/2025 (MT Newswires) -- The Bank of Canada will convene at the end of the month to make its next interest rate decision, noted TD.

Last week's jobs data may influence the BoC to hold rates steady, said the bank.

Labor market data for September indicated the Canadian economy added 60,000 jobs, significantly outperforming consensus forecasts for no job growth, stated TD. This increase offsets more than half of the losses incurred in the previous two months, with employment gains distributed across multiple sectors.

Notably, trade-exposed sectors, including manufacturing, agriculture, energy, and wholesale trade, recorded solid gains for the month. Zooming out, employment in Canadian industries most susceptible to United States trade remains below the performance of other segments of the economy. Despite the sturdy print, the unemployment rate remained steady at 7.1%, attributed to the largest influx of individuals into the labor force since November 2024.

Markets also responded by lowering their expectations of a 25 bps cut from 60% earlier at the start of last week to around 40% Friday, according to TD. An update to Canadian inflation, in around two weeks, will play a significant role in the BoC's decision.

Though underlying inflation continues to hover within the target range, strong evidence of waning inflation momentum will likely be required for the BoC to consider another rate cut, added the bank.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.