National Bank notes that inflows into Canadian ETFs in March were $844m, which is the highest in the last three years.
The total number isn't an impressive one but the flow highlights increasing demand for what Canada is selling: commodities. The export baskets of Canada and Russia are similar and the investment climate in Canadian commodities is improving.
Here's what Goldman Sachs has to say on the broader commodity picture:
"Since our call for commodities super cycle in Oct '20, S&P GSCI +125%. Rally has occurred w/out investor participation and no funding increase. That's creating a large capital deficit that's deepening...our conviction in a multi-year super cycle has risen substantially."
The market has been slow to give credit to the Canadian dollar but the January trade data was revised today to show the largest surplus since 2008. Calls for a 50 bps hike from the BOC on April 13 are now the consensus and Canadians are leaving the pandemic flush with cash and housing wealth with the economy finally fully reopening in March.
I have been making the case for the loonie for awhile and continues to see blue skies, starting with 1.20.
