MNI BRIEF: Canada Sees Record Q3 Funds Outflow On Bond Selloff

Investors pulled a record CAD41.4 billion out of their investments in Canadian securities in the third quarter led by a bond selloff, the federal statistics office said Friday, helping explain weakness in the Canadian dollar through a period of robust prices for its crude oil exports.

The quarter ended with global investors reducing holdings of Canadian bonds by CAD17.5 billion in September, a month where bond retirements of CAD20.4 billion were the highest since 2018. Statistics Canada also said the selloff pushed the country's long-term interest rates to the highest since December 2007. (See: MNI INTERVIEW: BOC Could Hike Once Or Twice More, Dodge Says) Canadian investors also bought CAD10.5 billion of foreign bonds in September.

The third quarter outflow of investment funds more than offset the gains in the first half of the year, and total foreign investment in Canadian securities through September slowed to CAD20.5 billion from CAD95.2 billion in the same period last year.