July credit data showed a deceleration of flow month on month, RMB loans issued dropping to RMB1,020bn from 1,903bn the prior month while total social financing came in at RMB1,690bn (RMB3,432bn prev). Credit flow remains strong compared to last year but with real economic activity picking up clearly the authorities have stepped back from the credit driven boost delivered over the past few months.
Chart pack and analysis attached.
Another solid non-farm payrolls report, with 1.763mn jobs added in July, taking the 3-month gain to 9.27mn. That means the US has now recovered roughly 40% of the jobs shed during the turmoil of March and April. The report cements confidence that the labour market continues to repair, mirroring the conclusions of yesterday’s weekly jobless claims, if not the lower than expected ADP print we got on Wednesday.
Chart pack and analysis attached.
