Talking Points:
- China’s National Bureau of Statistics released its lending data for January
- Aggregate Financing and New Yuan Loans reached their highest levels on record
- Data may help ease growth concerns but could stoke asset bubble speculation
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In the early part of Tuesday’s trading session, China’s National Bureau of Statistics released its credit data for January. New Yuan Loans showed a print of 2.51 trillion, greater than the consensus forecast of 1.9 trillion and December’s 597.8 billion. Aggregate Financing crossed the wires at 3.42 trillion Yuan as opposed to economists’ estimate of 2.2 trillion and the revised prior of 1.8 trillion. Both of these reading were the highest on record.
The historic level of lending may highlight the nation’s commitment to mitigate the slowing of the economy. China has been a catalyst for risk-off trading since the beginning of the year due to the financial markets’ uncertainty of its health and its government’s policy outlook. The surge in loans may reflect officials’ efforts to easy monetary conditions and boost growth. While the data may bode well for growth expectations in the world’s second largest economy, some traders may believe that aggressive lending growth could stoke financial bubbles.
Source: Bloomberg.
