SAFE Data Suggests US$11bn Outflows In July

Goldman Sachs note that their "preferred gauge of FX flows shows an outflow of around US$11bn in July, vs. US$9bn outflows in June. Foreign buying of onshore bonds (which represents inflows) rose further in July, but the inflow to the bond market was offset by outflows related to 1) Chinese residents' net buying of offshore equities through the bond connect program; and 2) continued investment income payout. Moreover, the portion of goods trade surplus being repatriated back onshore fell in July and thus inflows related to goods trade surplus were not as strong as what the headline goods trade surplus would suggest."