Whoa, the Chinese central bank has some work to do if we’re going to see the much anticipated slowdown in the second half. I said I would wait to see March figures after the blowoff in January (which may have been Chinese New Year affected) before drawing conclusions. Well, here they are, way ahead of consensus across the board on all monetary aggregates, new loans overshooting and aggregate financing, which includes the shadow bank sector, blasting into space:
Here’s the M2 growth chart, which is showing steady growth:
More importantly, new loans were firm:
And most importantly, aggregate finance went bananas:
These figures are for an economy gearing up on both traditional and shadow credit channels, not setting itself to slow. I’m going to have to back off on my second half China slowing thesis if this continues.
Any short term play on iron ore miners just got a nice boost. At least until the PBOC hits the brakes.
