Not much doubt about it now. Chinese new credit for March was out over the weekend and the credit tap is awwwn with total social financing at 2.86tr yuan and bank loans at 1.69tr:
Shadow banking surged to 40% of finance and appears to be forming a bottom:
M2 growth jumped to a one year high of 8.6%:
The three moth moving average for new credit is now at 42%:
And the rolling annual has surged to a record high:
Under the bonnet, household loans (mortgages mainly) appears to be turning though it’s early days:
Local governments are firming too:
Broad credit has based and is climbing:
No doubt about it. The credit tap is on. The question is where will it flow? China appears to be serious about making this pulse of stimulus more constructive for rebalancing (that is, less building) but the economy will have other ideas. The spillover to asset markets is predictable. If it is realty then iron ore is going to fly give supply constraints.
It’s too early to know for sure, and they may turn this off just as suddenly if there is a trade deal, but if this pace of new lending runs a few more months then something big in China is going to rip.
