Economists were way off in their calls for today’s international securities transaction data.

While economists expected to see foreign investors add $1.7 billion in Canadian securities in June, foreigners actually dropped their exposure to Canadian securities by $790 million in the month.

This is the first monthly decrease since February, observes BMO Nesbitt Burns, noting that total foreign investment is $7 billion lower year-to-date than over the same period last year.

BMO says that international net holdings of bonds dropped for the first time this year due to record retirements of government bonds. “However, year-to-date foreign investors have shown a healthy appetite for Canadian bonds. New corporate issuance in foreign markets also slowed considerably from prior months to $1.3 billion from an average of $4.6 billion over the first 5 months of the year.”

It notes that merger-related issuance by a major Canadian bank helped boost foreign investment in domestic securities to $4.7 billion. Also, Canadian investors continue to add to their foreign equity positions. Although in June, the $2 billion outflow is the lowest since November 2000, and was almost entirely invested outside the U.S.