Canada securities transactions overseas for June $9.04 billion.versus $13.37B final month

• Prior month $13.37 billion
• Canada investment abroad $9.04 billion versus $13.46 billion last month
• Canada foreign investment in Canadian securities $0.71 billion versus $-6.29 billion last month (revised from $-2.79 billion).

Details:

Foreign investment in Canadian securities: +$709M in June, first inflow since January.

• Bonds: +$6.9B (corporate +$5.6B, provincial +$3.0B, federal -$1.3B).

• Money market: -$3.2B (mainly private corporate paper -$3.0B).

• Equities: -$3.0B, led by banking and trade/transportation shares; partially offset by manufacturing and energy/mining.

• S&P/TSX Composite Index rose +2.6% in June.

Overall flows: Net outflow of -$8.3B from Canadian economy in June.

The net outflow of $8.3B in June (and $43.7B in Q2 overall) implies that Canadian capital is moving abroad faster than foreign capital is entering Canada (selling CAD and buying USD all things equal). This trend reflects strong domestic demand for foreign assets (particularly U.S. equities and non-U.S. bonds) while foreign investors remain cautious on Canadian securities, especially equities.