Below is a note from Hedgeye CEO Keith McCullough on why we're adding the Canadian Dollar (FXC) to the long side of Investing Ideas today:
"Oh Canada!
Back to the homeland I go for some more @Hedgeye Quad2 exposure...
Quad2 (the 2nd quadrant) is when both GROWTH and INFLATION are accelerating (in rate of change terms) in our GIP (Growth, Inflation, Policy) Model.
The reason why the Canadian economy is going to accelerate in Q2 is that was the quarter in 2016 when Canada saw its big rate of change slowdown.
Versus the +2.5% year-over-year growth rate Canada's GDP saw in the 2nd half of 2014 (prior to an epic Commodity #Deflation), Q2 2016 slowed sharply, to +0.7%.
The low of the Canadian GDP cycle was +0.1% y/y GDP growth in Q4 of last year. That's what this Canadian living in America (with an American firm and American kids!) calls one heck of an easy comp!"