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The most interesting thing we’ve read this morning comes from Cannacord Wealth Management, which sees a major sign of a top in the Canadian Dollar, and thus, by implication, a possible top in commodities (since the Loony is so tied to commodities, especially oil).What’s the sign? A possible move of an NHL team back to Canada.
Being the hockey fans that we (the Morning Coffee) are, we’ve always said the one of the best signs of a top for the Loonie would be the relocation of an NHL team back to Canada. The day the NHL relocates a franchise back to Canada may come sooner than any hockey fan in Winnipeg could have hoped for. Even Canadians who don’t follow hockey (is there such a thing?) have heard about the ongoing saga with the Phoenix Coyotes. Meantime, the potential sale of the Atlanta Thrashers has been reported by various media sources for sometime. If you believe the media reports, the NHL is facing glut of potential teams for sale, some say up to one third of NHL owners want out. In addition to the Coyotes and Thrashers, ownership changes could occur in the near future for the Los Angeles Kings, St. Louis Blues, Nashville Predators, Carolina Hurricanes, New Jersey Devils and New York Islanders. The NHL has four unofficial conditions to be met for readmission: 1) Adequate fan support; 2) A NHL size arena (18,000+); 3) Credible investor(s); and 4) No territorial conflicts. The top Canadian cities for a NHL relocation franchise (according to the Morning Coffee) are: 1) Toronto; 2) Winnipeg; and 3) Quebec City. Remember, what may be great for NHL hockey-mad fans in Winnipeg and Quebec City, a strong Loonie could create headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.