TXBA (Canadian Bank Index) - 60% Countercyclical Short Trade?
Updated
Hey traders,
Similarly to the US and EU, the Canadian economy is now expressing signals of running into a brick wall.
Canada's yield curve sits on the cusp of inverting for the first time in a decade... banks will increasingly become reluctant to lend as Canada's term structure turns negative. This will impact credit creation, and thus slow down economic growth. The market will begin pricing this in now, and we'll likely have a period of 12-18 months to generate an economic contraction that will significantly influence the price of corporate paper.
Shorting Canadian banks could be a good USD denominated trade as its likely that the USDCAD pair will experience nice strength over the next 12-24 months:
***This is not investment advice and is simply an educational analysis of the market and/or pair. By reading this post you acknowledge that you will use the information here at YOUR OWN RISK
Similarly to the US and EU, the Canadian economy is now expressing signals of running into a brick wall.
Canada's yield curve sits on the cusp of inverting for the first time in a decade... banks will increasingly become reluctant to lend as Canada's term structure turns negative. This will impact credit creation, and thus slow down economic growth. The market will begin pricing this in now, and we'll likely have a period of 12-18 months to generate an economic contraction that will significantly influence the price of corporate paper.
Shorting Canadian banks could be a good USD denominated trade as its likely that the USDCAD pair will experience nice strength over the next 12-24 months:
***This is not investment advice and is simply an educational analysis of the market and/or pair. By reading this post you acknowledge that you will use the information here at YOUR OWN RISK
Note
We are kissing the shorting level!!!Note
Now breaking support above the shorting level!!!
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