Canadian Employment Change (OCT) (12:00 GMT; 07:00 EDT)
                          (Change)               (Rate)
Consensus:         15,000                   6.4%
Previous:             16,200                   6.4%

Outlook:  Canadian employers are expected to have added 15,000 additional workers to the payrolls last month, making for the second consecutive month of expansion in the labor read.  Besides the total number of jobs added to the economy for the month though, the real interest in the long-term outlook for labor trends will last in the breakdown of full-time and part-time jobs.  After three consecutive monthly declines in net employment change through August, the following monthââ,¬â"¢s increase was still questionable as only a substantial jump in part-time work could offset the longer-term contraction.  Looking at Octoberââ,¬â"¢s read, a few trends will play a larger part in the overall change.  The string of seven rates continues to increase costs for Canadian firms and in turn stifles hiring trends.  Another ongoing issue for labor health is the manufacturing sector.  With the Canadian dollar holding out near its multi-decade highs against the currency of its largest trade partner, the pinch in the industry will continue.  A new and still developing issue for mines and exporters is the steady declines in commodities and specifically energy prices.  As demand and production cool for these goods, there will likely be a moderation in oil-rich regions like Alberta.  On the other hand, the strong rebound in autos recently, coupled with the strong domestic demand keeping total demand buoyant, will to boost the need for more employees.

Previous:  Firms added 16,200 Canadianââ,¬â"¢s to the national payrolls in September.  The increase was the first in four months, correcting the first incidence of three consecutive declines since 1992.  However, besides the immediate relief in its corrective nature, the monthly change still held many unfavorable statistics.  First of all, the addition of jobs was all in part-time sector.  Part-time jobs grew by 31,400 while full-time positions actually dropped by 15,200.  Furthermore, a recent survey by the Bank of Canada reported that businesses are less optimistic about future sales, forecasting a decline in demand for additional workers in the absence of business.  Also, the average annual hourly wages report showed a large deceleration from the 3.7 percent pace in August to 3.0 percent growth.  This was the slowest rate of wage growth in over a year and suggests the support given to the economy through consumer spending may wane in the months ahead.   One positive component in the breakdown was the much needed positive turn in factor jobs.  A large 19,300 jobs added has helped to cut the 12-month loss under 70,000.

US Change in Nonfarm Payrolls (OCT) (13:30 GMT; 08:30 EDT)
                           (Change)               (Rate)
Consensus:         123,000                 4.6%
Previous:               51,000                 4.6%

Outlook:  The markets are eagerly awaiting the October reading of non-farm payrolls following the massive revisions made to the August figures. Payrolls are expected to rise 120K this month, but the focus may be on September revisions. The paltry 51K report last month did little to curb enthusiasm for the US economy, due to the Labor Departmentââ,¬â"¢s claim that the full revision for the year in March could be an astounding 810K. Employment data released in the past few days bode well for an encouraging NFP report, as the ADP employment change jumped 128K from 78K in September while the employment component of ISM manufacturing tipped above the 50 boom/bust level to 50.8. The October labor market data may only be able to do so much for the US outlook, however, as the tepid 1.6% Q3 GDP report has created a highly bearish sentiment on the US economy.

Previous:  Although the September reading of US non-farm payrolls came in much weaker than expected at 51K, news that the Labor Department upwardly revised Augustââ,¬â"¢s figure by a whopping 188K offset any pessimism regarding the economy. The payroll data subsequently brought the unemployment rate to slip down to 4.6 percent from 4.7 percent the month prior. Additionally, the report showed that job growth from March 2005 ââ,¬â€œ March 2006 may have been about 41 percent higher than previously reported by 810K, marking the biggest revision since the Labor Department started benchmarking numbers in 1991. Meanwhile, average hourly earnings picked up 0.2 percent in September, bringing the annual rate to match a five year high of 4.0 percent. The labor market data led traders to believe that the Fed would stay on hold at 5 percent for into 2007, as bets were pared down to a 24 percent chance from 30 percent that the rates could be cut by the end of January.

US ISM Non-Manufacturing (OCT) (15:00 GMT; 10:00 EDT)
Consensus:         54.0
Previous:             52.9

Outlook:  Following the worse than expected print in its manufacturing equivalent, the United Statesââ,¬â"¢ ISM services survey for October is still expected to accelerate over the month of October.  A read above 50.0 denotes growth in the sector, while a read less than the pivotal number expresses a contraction.  Services, including banking, construction and retailers, will likely find there direction from the spending habits of domestic consumers.   The most recent report for retail sales for the month of September suggests production in the month ahead will slow.  A 0.4 percent drop in sales, the first contraction in three months, reveals a lack of orders coming in to factory gates.  On the other hand, October confidence levels may be indicative of a rebound in spending and demand for services.  The University of Michigan confidence survey actually jumped to its highest level since July of 2005.  Despite the consensus and positive sentiment figures, there are still some risks to the service sector.  The construction sector may continue its slide on the weak sales and building trends that have reinitiated themselves according to indicators released in the past few weeks.  Whatââ,¬â"¢s more, the drop in the factory sector could also be indicative of the same in service sector, as a lack of spending in one area may show up throughout the market.  The ISM manufacturing report actually dropped to 51.2 in October, its lowest level since June of 2003.  As the service sector account for 90 percent of the economy, fundamental positioning will likely be heavily influenced by the ISM report.

Previous:  Service activity in the US slowed to 52.9 over the month of September.  Though this read was still indicative of growth, it was the slowest such pace of expansive activity since April of 2003.  Economically, the drop in overall activity for the industry seems based in construction.  According to a government report, home building dropped 11.2 percent in the second quarter.  This was the biggest drop since the same period in 1995 and suggests that the 17 consecutive rate hikes and near record home prices have finally caught up with optimistic Americans.  However, despite the fundamental risks seen in the steady weight of housing, the statistics of the report were actually strong.  From the components, all the orders and production numbers have been strong.  New orders rose to the highest level since May, while backlog and new export orders have also advanced.

Richard Lee is a Currency Strategist at FXCM.