Home > May 2017 > May 12, 2017 China’s M2 Money dropped to 9 month low and Social Finance loans there slowed down

May 12, 2017 China’s M2 Money dropped to 9 month low and Social Finance loans there slowed down

Tonight the China’s Central Bank released the Total Social Financing, it’s an overview measure of credit and liquidity in their economy. It declined from March’s 2.12 Trillion Yuan down to 1.39 Trillion Yuan. This is the best way to sniff out financing done from the Shadow Banks in China. The total M2 Money supply also dropped. Shanghai Futures had most of the metals flat to down. German GDP came inline with estimates but Hong Kong had a BTE on their GDP numbers. In the US Session we have CPI and Retail Sales coming. Our Futures have been weak thru the Asian Session, and it is down .20% in the third hour of European Trade. Can’t believe we still have all the dip buyers trying to hold this market up? Unless China starts throwing out money like 2009 this party is over.

May 2017

  • Trading_Nymph

    China’s April loans growth highlights debt challenge
    May 12, 2017, 04:55:00 AM EDT By Reuters

    (Adds details, context and analysts’ quote)
    * April new loans 1.1 trln yuan, vs f’cast 714 bln yuan
    * April M2 money supply up 10.5 pct y/y, vs f’cast 10.8 pct
    * April total social financing 1.39 trln yuan

    BEIJING, May 12 (Reuters) – China’s banks unexpectedly
    extended more credit in April than in the previous month,
    highlighting the challenge confronting policymakers as they try
    to temper risks from rising debt.
    China’s central bank has been guiding short-term interest
    rates higher to help contain debt risks, though it is treading
    cautiously to avoid hurting economic growth.[nB9N1GG00I]
    The People’s Bank of China (PBOC) has increased its checks
    on banks’ off-balance sheet wealth management products – the key
    component of shadow banking credit, while the banking regulator
    has stepped up a crackdown on risky lending behaviors.
    Chinese banks extended 1.1 trillion yuan ($159.4 billion) in
    net new yuan loans in April, central bank data showed on Friday,
    rising from 1.02 trillion yuan in March.
    Analysts polled by Reuters had predicted new yuan loans of
    714 billion yuan.
    Julian Evans-Pritchard, China economist at Capital
    Economics, said lending held up relatively well in response to
    policy tightening.
    “The upshot is that the deceleration in credit growth which
    began last summer continued uninterrupted last month with a
    pick-up in loan growth more than offset by a decline in bond
    issuance,” he wrote in a note to clients.
    “This will feed through into weaker economic growth in the
    coming quarters but the slowdown should be gradual.”
    China’s banks extended a record 12.65 trillion yuan in loans
    in 2016 as the government encouraged credit-fueled stimulus to
    meet its economic growth target.
    The credit explosion stoked worries about financial risks
    from a rapid build-up in debt, which authorities have pledged to
    contain this year.
    China’s total social financing (TSF), a broad measure of
    credit and liquidity in the economy, fell to 1.39 trillion yuan
    last month from 2.12 trillion yuan in March.
    Total new credit to the economy, which includes bank lending
    as well as other forms of credit, increased by a record 6.93
    trillion yuan ($1.01 trillion) in the first quarter – roughly
    equivalent to the size of Mexico’s GDP.
    Broad M2 money supply (M2) grew 10.5 percent from a year
    earlier, the central bank data showed, slowing from March’s 10.6
    percent increase and missing forecasts for an expansion of 10.8
    Outstanding yuan loans grew at 12.9 percent by month-end on
    an annual basis. Analysts polled by Reuters had expected
    outstanding loans to rise by 12.5 percent.
    China’s foreign exchange deposits were at $777.5 billion at
    the end of April, compared with $772.2 billion a month earlier,
    the central bank added.
    Chinese leaders have pledged to shift the emphasis to
    addressing financial risks and asset bubbles which analysts say
    may pose a threat to the world’s second-largest economy if not
    handed well.[nL4N1HY3WX]
    The economy grew a stronger-than-expected 6.9 percent in the
    first quarter from a year earlier, giving it a solid tailwind to
    once again hit the government’s full-year growth target of
    around 6.5 percent. [nL3N1HP1F0]

  • Trading_Nymph

    Bloomberg’s piece today on the same confusion I have been having, why isn’t this market caring??? https://www.bloomberg.com/news/articles/2017-05-11/four-charts-that-show-china-s-equity-selloff-is-getting-ugly

  • panther341

    Nordstrom’s down another 8% after earnings. It was down 8% yesterday after Macy’s earnings – but the cake not baked enough.

  • panther341

    anticipating market reaction to news is difficult at best. what the market pays attention to varies from time to time. sort of like fashion. If I had it my way kelly green would be color of the year every year – but it isn’t so.