Canadian Capital Inflows Turn Positive For First Time Since April

Canadian International Securities Transactions (JUL)

Actual: C$1.502B
Expected: -C$4.500B
Previous: -C$4.330B (R+)

Canada’s second trade indicator, the international securities transaction balance (a measure of net purchases of Canadian securities), posted a much better than expected C$1.502 billion surplus. This clearly outperformed the C$4.5 billion deficit expected and the C$4.33 billion deficit recorded back in June. This was further the first positive balance in three months. Looking to the breakdown, interest in Canadian equities was clearly supporting the headline number. The net increase in Canadian stock purchases measured C$2.47 billion. At the same time, investment in bonds was nearly balanced at a C$345 million positive gap. On the other hand, money market interest clearly plunged with a C$1.32 billion deficit that represented the rising volatility through the month. It will be interesting to see how the balance changes next week under the influence of the global credit rout that has catalized volatility in nearly every asset class across Canada.
In the mintues after the release, USDCAD was little changed after testing new lows earlier in the morning.