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BOBL TECHS

(U1) Approaching Key Support

BUND TECHS

(U1) Holding Above Support

INDIA

Operation Switch Smaller Than Expected

BOND SUMMARY

A Calmer Asia Session

ASIA FX

Positive Risk Sentiment Offset By USD Bounce

FOREX

Greenback Edges Higher, Antipodeans Sag

By Yali N'Diaye
     OTTAWA (MNI) - Foreign investors acquired C$2.8 billion of Canadian 
securities in August as their acquisitions of Canadian equities and 
money market instruments outweighed their divestment in Canadian bonds, 
data from Statistics Canada showed Tuesday. 
     Meanwhile, Canadian investors cut their portfolios' exposure to 
foreign securities by C$0.2 billion after a C$13.1 billion investment in 
July. 
     As a result, the net inflow of funds into the Canadian economy, 
which is part of the financial flow account, was C$3.0 billion in 
August. 
     - OUT OF CANADIAN BONDS 
     Foreign investors rotated out of Canadian bonds in August, which 
was reflected in a C$7.4 billion divestment. 
     They sold C$C$3.8 billion of federal government bonds, for a C$32.5 
billion divestment year-to-date, the largest since January-August 2003. 
     Foreign investors also sold C$3.3 billion of private corporate 
bonds, the largest divestment since June 2015. Statistics Canada noted 
that new private corporate issues abroad were at their lowest level in 
30 months. 
     Provincial bonds were the only bond category to attract foreign 
flows in August, and even then, it was barely C$1.0 billion. 
     - FOCUS ON MONEY MARKETS, EQUITIES 
     Inflows into Canadian money markets and equities offset the 
divestment in bonds. 
     Foreign investors' holdings of money market instruments were up 
C$4.9 billion in August. Their acquisitions of Canadian equity and 
investment fund shares reached C$5.3 billion, the highest level since 
May 2017, and the third straight investment. 
     During the month, Canadian short-term interest rates increased 14 
basis points, while long-term rates were up 4 basis points. Canadian 
stock prices fell 1.0%. 
     - CANADIAN INVESTORS FAVOR FOREIGN BONDS 
     While foreign investors moved out of Canadian bonds, Canadian 
investors favored foreign bonds over foreign equities. 
     Investment in foreign bonds was up C$3.6 billion, mostly non-US 
bonds and, to a lesser extent, U.S. corporate bonds. 
     Canadian investors reduced their holdings of foreign equities by 
C$3.7 billion, with a focus on U.S. shares (-C$27.0 billion), while they 
acquired non-US shares. 
--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 
[TOPICS: MACDS$,M$C$$$]