The market sentiment remains risk-off amid rising virus cases around the world and fears over new restrictions and lockdowns.
China’s new loans are firmer than anticipated in July
In July, Chinese financial institutions managed to extend up to 1.45 trillion Yuan in net fresh Yuan loans. The given outcome beat experts’ estimates because an escalating trade feud with America actually threatens to apply more pressure on the decelerating Chinese economy.
The Asian country’s policymakers have been injecting more cash to stimulate financial institutions to lend to struggling businesses, although there’re indications that lenders are becoming cautious because defaults soar, hampering efforts to channel funds to sectors that require it.
Furthermore, some China watchers are afraid that the government’s shift in stimulating surge might provoke a return to its credit-powered spending practice of the past, thus making worthless its multi-year campaign to cut risks in the financial system and a huge pile of debt.
The firmer- than-anticipated lending data was published by the country’s banking and insurance watchdog, the PBOC pumps out more liquidity into the decelerating Chinese economy.
Market experts surveyed by Reuters had foreseen new Yuan loans of 1.2 trillion yuan, slipping abruptly from June's outcome of 1.84 trillion Yuan.
The country’s banks managed to extend a record 13.53 trillion Yuan in new loans in 2017, and lent up to 9.03 trillion yuan in the first half of 2018, which is a 13% leap from the same period of the previous year.
As a matter of fact, in July, household loans, generally mortgages, headed south to 634.4 billion Yuan compared to June’s result of 707.3 billion Yuan, as the major bank's data informed.
In July, household loans amounted to 43.8% of total new loans in contrast with June’s reading of 38.4%.
As for corporate loans, in July, they inched down to 650.1 billion Yuan versus 981.9 billion Yuan in June.
Additionally, in July, broad M2 money supply ascended by 8.5%, which is the highest reading for five months.
The US dollar has started the week on the positive footing, while riskier assets are dipping down. Let’s discuss last market movements in more details.
The overall sentiment remains upbeat amid vaccine hopes and improved US-China relationships. Let's have a closer look.
The market sentiment is mixed as investors weigh US stimulus package against the rising infections and worse-than-expected US unemployment claims. Jump in for fresh analysis of EUR/USD, USD/JPY, S&P 500 and gold!
US Initial jobless claims will be announced on Thursday at 15:30 MT time.
The US dollar has broken through the key resistance, it failed to cross since March so far. Riskier assets are dipping. Let’s discuss it in detail.