A stronger-than-expected Canadian jobs report has prompted a reassessment in money markets of when the Bank of Canada is likely to start cutting interest rates.

Implied interest rates in swaps market now suggests less than a 50 per cent chance the Bank of Canada will cut its key lending rate at its next policy meeting June 5. Prior to the data, those odds were pegged at about 58 per cent. In recent days, when employment figures in the U.S. came in stronger than expected, those odds had risen to above 70 per cent for a June cut.

Swaps markets are now implying 70 per cent odds for a cut, but not until the bank’s July meeting.

Canada’s economy added five times the number of jobs that were forecast for April and the unemployment rate unexpectedly held at 6.1 per cent, but wages grew at the slowest pace in 10 months, data showed on Friday.

The economy added a net 90,400 jobs while analysts polled by Reuters had forecast a gain of 18,000 jobs and the unemployment rate to rise to 6.2 pre cent.

The following table details how swaps markets are pricing in further moves in the Bank of Canada overnight rate, according to Refinitiv Eikon data minutes after the Canadian jobs data were released. The current Bank of Canada overnight rate is 5%. While the bank moves in quarter point increments, credit market implied rates fluctuate more fluidly and are constantly changing. Columns to the right are percentage probabilities of future rate moves.

And here’s how markets were pricing in monetary policy changes just prior to the data being released:

More to come