Data out during the China afternoon yesterday on financing (June)
As I said in my heads-up post, it's the New Yuan Loans & Aggregate (social) Financing numbers that are the focus in this release. And wow, a huge blow out
New Yuan Loans 1540bn CNY
- expected 134200.0bn yuan, prior was 1110.0bn
Aggregate Financing 1780bn
- expected CNY 1500.0bn, prior was 1062.5bn
Money Supply M2 y/y 9.4%
- expected is 9.5%, prior was 9.6%
Money Supply M1 y/y 15.0%
- expected is 15.9%, prior was 17.0%
Money Supply MO y/y 6.6%
- expected is 6.8%, prior was 7.3%
We've been hearing (over and over) about efforts to clamp down on credit growth but countering this is the upcoming National Congress - Chinese authorities will not want a slowing economy going into this.
Thus, despite protestations of a desire to deleverage, as you can see credit growth is not slowing. The housing market (and property speculation & hence borrowing) is helping fuel this, as is a shifting of loans away from shadow banking and onto bank books.
In the short-term, growth in credit in China (and policy choices to support the real economy going into the Congress) are a supportive factor for China-proxies, such as the AUD.
