• We believe active investors’ success in adding value in Canada’s markets in 2017 will hinge on their ability to navigate an increased probability of extreme economic outcomes – both good and bad.
• Left-tail outcomes could result from protectionist U.S. trade policy, including Donald Trump’s promised renegotiation of NAFTA, and the potential for higher interest rates that would affect Canada’s debt-laden consumers and detract from GDP growth by lowering consumption and residential investment.
• Right-tail opportunities could develop if pro-growth policies in the U.S. drive economic growth north of the border by spurring exports and business fixed investment.
• As U.S. rates rise, we would expect Canadian rates to rise and for the yield curve to steepen. However, the Bank of Canada’s more accommodative stance would likely translate to a slower pace of increases than in the U.S.

….continue reading for the & “Invesment Implications” HERE

…related from Michael:

For Canada the Trump Effect Is Unavoidable