CHINESE CREDIT EXPLODES HIGHER - AGAIN!!

  • Just after 4am ET (04-12-19), the S&P futures surged above 2,900 when the PBOC reported that in March, new yuan loans jumped by 1.69 trillion, far above 1.25 trillion estimate, while total social financing in March soared higher by 2.86t yuan - the highest March increase on record; smashing the 1.85 trillion yuan estimate, and more than four times the February 703BN yuan increase.
  • The March number was 80% higher than the year ago March print, and the YTD TSF cumulative total is 40% higher than a year ago!

  • Run-rated, and assuming no further growth at any month in the rest of 2019, China's TSF is set to close 2019 some 12% higher than a year ago, and nearly twice as high as China's official GDP growth rate.
  • March shadow banking once again printed in the green, following January's surprising jump (and following February's drop), suggesting that China has once again eased the reins on its local shadow banking creation in order to spark both the credit impulse and pad China's economic rebound.
  • In March M2 rose +8.6% y/y; also stronger than the est. +8.2%, and well above the February +8%. In other words, it once again appears that China is doing everything in its power to flood the economy with new credit and reversing the concerns we noted last month emerging from the sharp February TSF drop. It also explains why futures surged above 2,900 once the number hit.
  • China's credit-based easing will likely continue to accelerate until the summer, and which point Beijing will step off the gas, and while the residual credit momentum will carry China for the next few months, the next deleveraging-based slowdown will likely take place in the second half of 2019 and into 2020, roughly at the same time with what consensus now believe is when the next US recession will take place.

 



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SOURCE:  04-12-19 -   - "China's Debt Bomb Is Back: Beijing Injects Most Ever Credit For Month Of March"

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