China released its April new yuan loans overnight and the news is more slowing in growth. Total social financing was 1.55 trillion split evenly between bank loans and shadow lending. Both missed consensus of $800 billion yuan each:
That was 12% down on April 2013 growth:
M2 rebounded to target at 13.2%:
The slowdown is still being driven by the clamp on the trust market and given China’s leaders were so vociferous about no more stimulus yesterday, one can only assume that the slowing credit is part of the plan. Credit is still growing at 15.7% per annum but it’s swiftly declining and is at its slowest since early 2006. From Capital Economics:
This month’s data decisively answers a question that’s been bugging me for months. Interbank markets have been much easier than last year over the past eight weeks. Some have argued that this is indicative of stimulus. It’s not. It’s abundant liquidity in the financial system owing to a soft shadow banking sector, especially around trusts. Prudential tightening is slowing credit enough that easier bank borrowing rates aren’t raising demand.
Those looking for a swift rebound in the trust-reliant Chinese property sector are going to be disappointed. Iron ore take note.
