29 Jan 2015
Eurozone emerges from credit crunch – ING
FXStreet (Barcelona) - Teunis Brosens of ING reviews the Eurozone credit data release, noting that the growth in M1 from 6.9% yoy to 7.8% points to the eurozone economy picking up growth later this year.
Key Quotes
“The multi-year contraction in Eurozone bank lending has finally come to an end. Growth in loans to households and businesses originated by banks (adjusted for sales and securitisation) stood at +0.1%YoY in December, up from -0.2% the month before.”
“The strong net monthly flow of loans to non-financial businesses stood out, jumping from -€3bn in November to +€11bn in December (adjusted for sales and securitisation).”
“Meanwhile, M3-growth accelerated to 3.6%YoY. This is the highest rate in two years, but is still well below pre-crisis rates and does not point to an imminent pickup in inflationary risks. Indeed, as long as bank lending is hovering around zero, the prospect is for prolonged lowflation.”
“Encouragingly, growth in M1, one of the best leading indicators of the Eurozone business cycle, accelerated to 7.8%YoY from 6.9%.”
“Credit no longer seems to act as a drag on European growth. Any remaining credit supply constraints should be addressed by the ECB’s QE starting in March."
"Moreover, the acceleration in M1-growth points to a pickup in economic growth later this year. Whether faster growth will indeed materialise very much depends on how the Greek situation is going to be tackled.”
Key Quotes
“The multi-year contraction in Eurozone bank lending has finally come to an end. Growth in loans to households and businesses originated by banks (adjusted for sales and securitisation) stood at +0.1%YoY in December, up from -0.2% the month before.”
“The strong net monthly flow of loans to non-financial businesses stood out, jumping from -€3bn in November to +€11bn in December (adjusted for sales and securitisation).”
“Meanwhile, M3-growth accelerated to 3.6%YoY. This is the highest rate in two years, but is still well below pre-crisis rates and does not point to an imminent pickup in inflationary risks. Indeed, as long as bank lending is hovering around zero, the prospect is for prolonged lowflation.”
“Encouragingly, growth in M1, one of the best leading indicators of the Eurozone business cycle, accelerated to 7.8%YoY from 6.9%.”
“Credit no longer seems to act as a drag on European growth. Any remaining credit supply constraints should be addressed by the ECB’s QE starting in March."
"Moreover, the acceleration in M1-growth points to a pickup in economic growth later this year. Whether faster growth will indeed materialise very much depends on how the Greek situation is going to be tackled.”