Short Canada Trade via CIBC and CAD Exposure

about 2 months ago

Alfonso Peccatiello

"I think Canada is a market to watch... there’s going to be a short Canada trade coming like soon... the poster child for Canadian leverage on the banking side is generally CIBC. So, uh, and actually it had a really nice outside day today. So like shorting CIBC or shorting the Canadian dollar against whatever short CAD yen, long dollar CAD, whatever, all those things I think might make sense as the market hasn’t really woken up to the pretty weak data in Canada."

Based on deteriorating economic data in Canada--with rising unemployment (jumping from around 5% to 7.1%), negative GDP and weakened housing metrics--the speaker is signaling an actionable trade opportunity. The recommendation is to take a short position on Canadian financial exposure, such as shorting CIBC or engaging in CAD/USD trades (e.g., shorting CAD against the yen or longing the USD against CAD) as a reaction to structural vulnerabilities in the Canadian market.