On Friday TD Securities entered a short.......>

FOREX: On Friday TD Securities entered a short CAD/SEK position (spot reference:

SEK6.98) with a target of SEK6.50 and a stop-loss of SEK7.20.

- TD reason that "following a large Q4 GDP miss, we think the tactical

conditions are in place for CAD to weaken. The dip in residential investment

highlights interest rate sensitivity concerns. Indeed, compared to previous

tightening cycles, rate-sensitive components are evolving in a much weaker

fashion. Importantly, the Q4 disappointment in GDP (+0.4%) fell well below

market (1.0%) and BoC estimates (1.3%). This will push the output gap wider than

the BoC expected for Q4. As such, the data effectively gives markets the green

light to price in some form of easing into the curve - whether justified or not.

Within the G10, the CAD has been second to GBP in performance vs. the USD on a

YTD basis. At the same time, the SEK has been the weakest vs CAD. This comes

against a backdrop of weaker CAD growth but a rise in the S&P 500, to which the

CAD has demonstrated a heightened sensitivity. This alone is unlikely to sustain

CAD performance. Meanwhile, we think SEK is "weak enough", leaving CAD/SEK due

for some mean reversion."