Credit in China fell in April for the first time since 2017 (or 2005)

Data from China on credit in April, via Bloomberg Economics (gated), shows it shrank for the first time

• government bond sales slowed, more government bonds were repaid than sold in the month
• loan expansion was worse than expected in a sign of weak demand

Aggregate financing is a broad measure of credit. It fell by almost 200 billion yuan in April from March

• the first time the measure has declined since comparable data began in 2017
• looking back further, using a smaller data set that excludes things like government funding, it was the first decrease since October 2005
• financing from shadow banking (activities outside the formal banking system) also fell

– also recorded a drop, weighing on overall credit.

Financial institutions offered 731 billion yuan

• lower thann projected 916 bn

Growth rate of outstanding loans edged down to 9.1% y/y, from 9.2% in March

—

Coming up from China to make up somewhat for this slow down is:

• China plans to issue special ultra-long term treasury bonds to raise 1 trillion yuan

Also from China over the weekend:

• China’s April CPI +0.3% y/y (vs. +0.1% expected) and PPI -2.5% (expected -2.3%)

This article was written by Eamonn Sheridan at www.forexlive.com.