China - July credit data

Headline credit growth weakened in July, and even though M1 growth strengthened, the data don't suggest "stimulus" that can turn around the current trajectory of the economy.

There continues to be little upwards momentum in China's credit data. Credit growth slowed in July. That wasn't particularly surprising given the strong headline growth in July, and the smoothed average of the last three months is still up. That said, new credit issued in July was the lowest since 2014, and the credit impulse last month does look to have fallen. Mortgage lending remains weak.

There was at least a further pick-up in M1 growth in July. But that was largely because of the acceleration in M2. As a proportion of broad money, M1 actually fell, and although a preliminary estimate of corporate sector liquidity preference improved, the rise was very mild.