Comments
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PBAgree with bearish sentiment that others have stated below. Crude is headed lower in my opinion. Canadian economy is a slow motion train wreck. The largest risk in my opinion is if the US markets continue lower then USD will strengthen as everyone goes to cash. Look at the USDCAD chart in 2008 sell off. I am Canadian as well.
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JPClosed balance of trade at 1.3225. Total gains +125/+150 pips
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JPMoving stop to 1.3225
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MCI really like the bearishness in the comments section here. Canada has become a contrarian's delight. All the unforced errors the politicians are making makes me think if your time horizon stretches beyond political cycles, then you should be a buyer of the loonie. A weakening WTI, a massively widening WCS differential due to rudderless pipeline regulation, a weakening housing market, a timid Bank of Canada, retails sales headwinds, a horribly indebted consumer, a challenging political hot potatoe with the Meng arrest, and all of this gets us to $0.75? How is this a bearish set up? Some of these negatives are likely to be temporary issues. Maybe the absolute bottom in CAD happens once the debt rating agencies downgrade Canada from its AAA rating. Canada is not a banana republic, so its currency will mean revert against the USD. Long-term this means $0.80-$0.85.
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JPTaking 1/3 off at 1.3200. Moving stop to B/E
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HSmore tea leave reading
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OOLike the SPX call but I would disagree on the CAD and energy moving together. The two had ~80% correlation longer term but it has not held in the past 1.5 years. I agree with Mark S. below. Tredeau is killing the energy sector. Sadly it looks like might stay for another term given weak opposition in next year's election. Be careful with this one.
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DPWhy do most interviewers here have a lisp? is it a prerequisite for the job? lol
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MAThis trade developed today! spot on!
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FBThe oil chart is more bullish than I thought which is interesting given the fundamental bears on oil and the CAD economy.Is there a catalyst developing that few understand yet.? I am very interested to see how this comes out.
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MSI am going to predict this is a brutal call. Trudeau is who he is betting on. See this tweet from a well know economic reporter in Canada in response to Trudeau's nonsense answer. Also Oil hasn't moved with the dollar over the past year because Trudeau has intentionally crippled the oil industry. https://twitter.com/LarryBermanETF/status/1074438383462744065
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JOThe SPX recovery has been impressive. I'm also getting hugely divergent information and recommendations (way up versus way down). CAD idea makes sense if you're bearish USD. Oil? I think people get way too excited about heads and shoulders, a tenuous and single data point.
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JMI think the probabilities do NOT favour this trade - balance of trade, inflation, interest rate differential, GDP growth, commodity prices (oil??). It is ironic that one of the few pipelines moving forward in Canada these days is the Keystone pipeline (approved by Trump!) Trudeau loves to spend money - he is definitely a risk factor, not an asset! https://www.huffingtonpost.ca/2018/09/18/trudeau-government-spending-2018-summer_a_23527550/
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MAyou posted the wrong chart when he was breaking down the USDCAD trade...fyi