{"id":3091,"date":"2010-11-30T14:40:57","date_gmt":"2010-11-30T14:40:57","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3091"},"modified":"2025-03-27T15:49:08","modified_gmt":"2025-03-27T15:49:08","slug":"eurozone-monetary-weakness-spreading-to-core","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3091","title":{"rendered":"Eurozone monetary weakness spreading to core"},"content":{"rendered":"<p>Eurozone real narrow money, M1, has stagnated over the last six months, suggesting that economic growth will slow sharply in early 2011 &ndash; see previous <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2010\/11\/26\/eurozone-us-monetary-trends-diverging.html\">post<\/a>.<\/p>\n<p>M1 comprises currency in circulation and overnight deposits. The first chart shows the six-month change in real overnight deposits broken between the &#8220;core&#8221; and &#8220;periphery&#8221; (currency figures are not available by country).<\/p>\n<p>The pace of contraction in the peripheral group eased in October but still signals economic stagnation, at best, in early 2011. The further fall in Eurozone-wide growth last month reflected a loss of momentum in the core, casting doubt on the ability of these economies to continue to decouple from peripheral weakness.<\/p>\n<p>The second and third charts show a country breakdown. Real M1 deposits have contracted over the last six months in all five peripheral economies and also in Belgium and the Netherlands.\ufeff<\/p>\n<p>The ECB may have contributed to this weakness: its decision to withdraw 12- and six-month lending facilities has resulted in a 20% fall in the monetary base since June, in turn pushing up EONIA and increasing funding pressures on struggling banks. A reinjection of liquidity is urgently required but policy-makers are reluctant to reopen the lending window for fear of being swamped by demand from weaker sovereigns seeking back-door support via local banks.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" style=\"width: 680px;\" src=\"\/storage\/chart1_30-11-2010.gif?__SQUARESPACE_CACHEVERSION=1291130740523\" alt=\"\" \/><\/span><\/span><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" style=\"width: 680px;\" src=\"\/storage\/chart2_30-11-2010.gif?__SQUARESPACE_CACHEVERSION=1291130760399\" alt=\"\" \/><\/span><\/span><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" style=\"width: 680px;\" src=\"\/storage\/chart3_30-11-2010.gif?__SQUARESPACE_CACHEVERSION=1291130778266\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Eurozone real narrow money, M1, has stagnated over the last six months, suggesting that economic growth will slow sharply in early 2011 &ndash; see previous post. M1 comprises currency in circulation and overnight deposits. The first chart shows the six-month change in real overnight deposits broken between the &#8220;core&#8221; and &#8220;periphery&#8221; (currency figures are not [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3091","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3091"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3091\/revisions"}],"predecessor-version":[{"id":5400,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3091\/revisions\/5400"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}