Canada to Probe Leak of April Employment Data -- Update

OTTAWA -- Canada's national data-gathering agency said it would investigate how sensitive employment data for April were distributed before the official release Friday, triggering brief but noticeable trading activity on foreign- exchange markets.

Bloomberg News published a story on its web site Friday, shortly before 8 a.m. Eastern time, indicating Statistics Canada would report a job loss in April of about two million, and that the unemployment rate jumped to about 13%. Bloomberg cited a person familiar with the data who spoke to the news agency on the condition they not be identified.

The official release from Statistics Canada at 8:30 a.m. indicated the economy shed 1.99 million jobs, and the unemployment rate did indeed climb to 13% from 7.8% in the previous month.

"We are investigating and we will take appropriate actions," said Jacques Fauteux, the agency's assistant chief statistician, in an interview.

A spokesperson for Bloomberg News declined comment.

A spokesman for Canadian Finance Minister Bill Morneau said the leak was "unacceptable," adding the government would "put the necessary processes in place to ensure this does not happen again."

Currency watchers said the information led to trading activity in the Canadian dollar, as the U.S. dollar weakened slightly against its Canadian counterpart, starting at roughly 7:50 a.m. The U.S. dollar was trading at about 1.3953 versus the Canadian dollar before the Bloomberg report, and weakened to 1.3938 before recouping losses later in the morning.

"Put into context, the reaction was relatively muted -- but still significant enough to suggest that the early release did trigger trading activity," said Karl Schamotta, chief market strategist at Cambridge Global Payments.

Derek Holt, an economist at Bank of Nova Scotia, described the episode as a "major security breach" that threatened "to tarnish the reputation of Canadian markets."

Before the coronavirus pandemic, journalists would gather at Statistics Canada's offices for a media lockup, in which outlets would be granted 60 minutes to review the data. During that hour, reporters would prepare headlines and a story for release at 8:30 a.m. Traders in the fixed-income and foreign-exchange markets would respond immediately once the data were available.

Statistics Canada ended the media-lockup procedures to avoid the possible spread of the new coronavirus. Media outlets must get the data from the agency's web site, once they are posted at about 8:30 a.m.

Canada's labor-force survey is arguably the most closely watched piece of data that Statistics Canada releases, as it offers a broad, timely measure on the health of the economy. Much anticipation surrounded the April report, in terms of how much more deterioration there was in the labor market compared with March.

This isn't the first time Statistics Canada has had to deal with the early release of data. Last year, data measuring the country's gross domestic product were released on its web site before official release. In 2011, an independent probe by KPMG indicated Statistics Canada was told back in 2004 it was releasing data to paying distributors ahead of the official release, but the agency didn't fix the flaw until 2010.

Write to Paul Vieira at paul.vieira@wsj.com


  (END) Dow Jones Newswires
  05-08-20 1416ET
  Copyright (c) 2020 Dow Jones & Company, Inc.

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