A global dearth of liquidity snbchf.com electricity history timeline


The chart below shows the euro area’s narrow money supply aggregate M1 (stock) and its year-on-year growth rate. z gas el salvador empleos M1 in the euro area is almost equivalent to US TMS-2, which makes it a good enough stand-in (it includes savings deposits that are in practice payable on demand; however, it lacks euro deposits belonging to foreign residents and central government deposits).

It is worth noting that a slowdown to a 0% growth rate triggered crisis conditions in 2008. After a sharp, but short term spike in money supply growth after the ECB made emergency liquidity facilities available to European banks to mitigate the fallout from the US housing bubble implosion, crisis conditions promptly returned when these facilities expired and money supply growth fell to around 1% in 2011.

Although recent surveys show that lending standards in the euro area have eased considerably, bank lending growth remains quite anemic. Lending to non-financial corporations recently grew at just 1.75% y/y, while lending to households grew at approx. 2.6% y/y. gas 0095 download Total bank credit growth (incl. lending to governments and other loans) amounted to 3.5% y/y, which is quite similar to recent bank credit growth in the US (3.4%).

In other words, most of the expansion of the money supply in recent years can be ascribed to QE – and the ECB has halved the size of its asset purchase program again to EUR 15 billion per month as of October and plans to discontinue new purchases entirely at the end of this year (at the peak, it bought EUR 80 billion in securities per month).

We have highlighted the three most recent slowdowns in money supply growth associated with economic crises and declining asset prices. In 2000, a slowdown to 5% annualized growth was sufficient to trigger an economic downturn in concert with a recession in the US after the technology mania ended. what is electricity It not certain yet where the threshold will be this time, but there are already some indications that it may be at a higher level than in 2008 and 2011. electricity meme The current growth rate of 6.8% is still quite brisk, but it is down from more than 14% at the peak in 2015 and this downtrend is almost certain to continue.

Reinvestment of the proceeds from maturing bonds will continue so as to prevent the ECB’s balance sheet from shrinking, but a stagnating balance sheet is materially different from an expanding one. Based on the growth in bank loans and the concomitant slowdown in QE, we concluded a few months ago based on a rough estimate that TMS growth in the euro area was likely to fall to less than 5% y/y by the end of the year. We still believe this is likely to happen sometime between December and February.

Evidently, no serious reflation efforts are underway as of yet, although the PBoC has cut minimum reserve requirements several times this year and is frequently seen injecting short term liquidity to keep repo rates under control. gasbuddy near me Recently chatter about an imminent rate cut has become more insistent. Over the past few days it has intensified, as the rally in the yuan on the heels of the talks between Donald Trump and Xi Jinping was seen as giving the PBoC more leeway to ease.

So far, said rally was a one-day wonder and we are not sure whether a rate cut will actually do much to reverse the trend. electricity usage calculator Besides, as we always point out, the effects of the slowdown in money supply and credit growth have not fully played out yet – a sizable lag is to be expected. For example, by the time the full effects of the slowdown from 2014 to early 2015 were felt around the world, growth in China’s M1 had already reversed back up again and was rising steeply. types of electricity Conclusion

In summary we can say that although y/y money supply growth in the euro zone and Japan is still fairly strong for the moment, the trend is definitely no longer supportive. Not surprisingly, we have recently not only seen weakness in stock prices, but also fairly sharp breakouts in credit spreads, as positive arbitrage effects are beginning to dissipate.

Credit markets in particular were benefiting from the ECB’s corporate bond buying program. electricity jeopardy 4th grade As we have pointed out in past articles on credit spreads, the fact that spreads in the euro area had begun to rise while US credit spreads were still trading close to their lows constituted a warning sign, as the former have been leading the latter for quite some time.

*In particular, the BoJ only counts only deposit money belonging to members of the private non-financial sectors as part of M1 – which means that non-bank financial intermediaries are excluded (Frank Shostak’s money AMS measure for Japan exhibits considerably greater volatility – unfortunately we don’t have the resources and/or time required to obtain the data he has access to).