Eurozone M3 data are out…
That’s the annual growth rate of the euro-zone broad money supply (M3) falling from 3.1 per cent to a well below expectations 2.6 per cent in March and allowing a quick segue into a good news/ bad news post ahead of next week’s ECB meeting and increasingly probable cut. Read more
From the ECB’s September update on monetary developments in the euro-area released on Thursday:
That’s euroland M3 – the broad money supply measure — coming in below expectations and dropping again to 2.7. Really brings to mind Draghi’s warning to the Bundestag that “In our assessment, the greater risk to price stability is currently falling prices in some euro area countries”, doesn’t it? Read more
China’s December lending and money supply growth exceeded economists’ estimates, reports Bloomberg, with new loans totalling 640.5bn yuan ($101bn) for the month. M2 rose 13.6 per cent, compared with the 12.9 per cent median of 18 estimates of economists surveyed by Bloomberg. People’s Bank of China governor Zhou Xiaochuan said on Sunday the nation must be ready to combat possible shocks from Europe’s debt crisis and an uncertain US economic outlook, echoing comments by Premier Wen Jiabao. Meanwhile the WSJ says a top-level financial policy meeting ended in Beijing on Sunday with little in the way of concrete announcements, and no mention of liberalisation of interest rates for bank depositors, which some analysts had been expecting.
Back in 2011, FT Alphaville made a big point of highlighting that tight bank funding conditions in the eurozone were largely driven by a “crunch” in the supply of quality collateral.
While such things as repo rates, central bank actions and Bund yields certainly supported the thesis, one very important dataset — the M3 monetary aggregate — failed to reflect the condition. Read more
Here’s one for the inflation vs deflation debate.
According to the latest figures from the European Central Bank, there was an unexpectedly large bounce in eurozone M3 money supply in August. Read more
Eurozone money supply is contracting all over at the moment — except in Italy.
Which is curious. And possibly sovereign debt-related. Read more
Merrill Lynch poses the following question in an economic report out last Friday:
Too much money printing?
While the world’s best brains work furiously to alleviate the current financial crisis by employing all sorts of monetary and fiscal measures — tending to the liquidity nature of the problem — Michael Lardelli, posting on Australia’s ‘Online Opinion’, proposes a refreshingly different problem solution.
Notably he doesn’t blame liquidity or credit for the crisis at all. Rather, he says, it was declining global energy resources that were to blame for all our ails. Read more