Independent Strategy

Tags: Credit

The ECB’s fingerprints remain all over the Eurozone money supply and credit numbers, with M3 hitting 11% yoy in November, the strongest reading we’ve seen thus far. This continues to be propelled by M1 which is up 14.2% yoy, overnight deposits up €1.053trn year-to-date.  We’ve also hit something of a milestone with overall M3 now back at pre-GFC/EZ debt crisis trend levels.

China December money supply ticked up, reflecting easier financial conditions.  We also saw solid growth in total social financing, which came in ahead of expectations.  The authorities have been keen to avoid an overt debt splurge, trying to generate more targeted easing, particularly focusing on transmission to SMEs in the private sector.  These numbers suggest this has been a partial success...

Quite a slowdown in credit growth during October, certainly compared to the rate we saw last year.  While the trend for shadow sector deleveraging continues there was also quite a sharp slowing of bank loans.  Corporate bond issuance remained muted while there was a pronounced deceleration in the ‘other’ category, which now encompasses local government bond issuance.

Eurozone saw a renewed uptick in money supply growth in August, but it was driven by a further increase in M1 rather than broader money.  Credit growth seems to be on a firmer footing, with strength being driven by France and Germany while in Italy and Spain we’re still seeing deleveraging, notably on the corporate side.  And deposits still growing faster, suggesting some caution.  Quite positive from the ECB’s perspective, particularly with the latest easing package yet to factor.

China

POST » 11th September, 2019 » China August Money & Credit

Chinese August money supply and credit data was in line with market expectations.  Money supply growth remains stable.  Even if M2 was fractionally above estimates the broad money growth rate has been basically static for the past eighteen months.  On the credit side loan growth picked up a little from last month, but overall not that different to what we saw this time last year.

Stronger than expected rise in credit during June with the culprit appearing to be an increase in local government bond issuance, reflecting official efforts to support the domestic economy.  Loan growth continues to run well ahead of nominal GDP.  And with no underlying pick up in money supply growth the velocity measures also remain weak.

Money supply continues to tick up again, but overall there is not much to suggest we’re in any marked re-acceleration phase, which is equally evident in the persistently weak money multipliers.  Credit data surprised on the downside thanks to some moderation in consumer demand for money.  Non-financial side looks stronger.

Tags

ADP (7) Agriculturals (1) Asia crisis (1) Asset Allocation (1) Australia (2) Autos (1) Bank of Japan (1) Big Data (1) BoJ (1) Bonds (6) Brazil (1) Brexit (5) Canada (1) Capital Goods (2) Central Bank (8) Challenger (1) China (20) Claims (1) Climate change (2) Commodities (1) Copper (1) Coronavirus (4) Corporate Bonds (1) Corporate Debt (2) Covid (3) Covid-19 (50) CPI (9) Credit (45) Current Account (1) Debt (2) Debt Crisis (4) Democracy (4) Demographics (9) Deposits (1) Disruptive Technologies (4) Durable Goods (1) Earnings (1) ECB (10) Elections (2) Emerging Markets (4) Employment (23) Equities (1) Euro (3) Eurogroup (1) Europe (2) Eurozone (19) Exports (2) Factory Orders (6) Federal Reserve (8) Fixed Income (2) France (1) FX (2) GDP (12) Germany (15) Globalisation (8) Global Pandemic (3) Gold (2) Google Mobility (49) HICP (1) Hong Kong (1) Housing (5) IFO (3) Income (1) India (1) Industrial Production (9) Inflation (25) Interest Rates (11) Internet (1) Investment (5) IP (9) Iran (4) Ireland (1) ISM (2) Italy (6) Japan (5) Jobless Claims (1) Korea (3) Labour Market (11) Liquidity (8) Manufacturing (3) Monetary Policy (19) Money (4) Money Market (1) Money Supply (19) Myanmar (1) New Monetarism (6) New Zealand (1) Oil (6) Online (1) Payrolls (25) PCE (2) PMI (1) PMIs (1) Politics (10) Populism (6) Portugal (1) PPI (4) Production (1) Productivity (2) Profits (1) QE (5) Quantum economics (5) Real Estate (1) Redline Money (15) Reserves (3) Retail Sales (11) Russia (2) Services (3) Services PMI (1) Sovereign Bonds (3) Sovereign Debt (4) Spain (4) Sterling (1) Sweden (2) Technials (1) Technicals (124) TICS (1) Total Social Financing (13) Trade (10) TSF (4) Turkey (1) UK (18) Ukraine (1) Unemployment (22) US (35) USD (9) Vietnam (1) Wages (22)

In the Media