Foreign investment in Canadian securities reached $12.7 billion in July

Foreign investment in Canadian securities reached $12.7 billion in July, mainly from acquisitions of federal government bonds. At the same time, Canadian investment in foreign securities totalled $13.1 billion, led by record purchases of foreign bonds.

Foreign investment in Canadian securities reached $12.7 billion in July, up from $10.3 billion in June. Overall, foreign investors acquired Canadian bonds and, to a lesser extent, equities, but reduced their exposure to money market instruments.

Non-resident acquisitions of Canadian bonds totalled $11.1 billion in July. Foreign investors acquired $5.2 billion of federal government bonds. This was the first monthly investment this year. From January to June, foreign divestment in federal government bonds totalled $33.9 billion. Non-resident investors also added $3.8 billion of private corporate bonds to their holdings in July, the lowest level since January. Canadian long-term interest rates were up by 22 basis points in July. The Bank of Canada raised its benchmark overnight interest rate by 25 basis points to 1.5% in July, the second increase so far this year. In general, interest rates and bond prices move in opposite directions.