{"id":4644,"date":"2023-01-30T00:09:49","date_gmt":"2023-01-30T00:09:49","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=4644"},"modified":"2025-03-27T15:50:38","modified_gmt":"2025-03-27T15:50:38","slug":"eurozone-money-trends-still-weakening","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=4644","title":{"rendered":"Eurozone money trends still weakening"},"content":{"rendered":"

Eurozone flash PMIs this week were less bad than expected, bolstering a growing consensus that economic prospects are improving. Monetary trends continue to argue the opposite. <\/p>\n

The preferred narrow money measure here – non-financial M1 – fell for a fourth consecutive month in December in nominal terms<\/span>. Bank lending also contracted on the month, while the broad non-financial M3 measure grew by just 0.1%. <\/p>\n

The three-month rate of contraction in narrow money is a record in data back to 1970. Three-month growth of non-financial M3 is down to 2.3% annualised, less than half its 2015-19 average. Bank loan growth is also now below its corresponding average – see chart 1. <\/p>\n

Chart 1<\/strong><\/p>\n

\"\"<\/span><\/span><\/p>\n

Bank lending weakness is being driven by repayment of short-term corporate loans, consistent with a violent downswing in the stockbuilding cycle – chart 2. <\/p>\n

Chart 2<\/strong><\/p>\n

\"\"<\/span><\/span><\/p>\n

The six-month rate of decline of real narrow money was little changed from November’s record despite a sharp drop in six-month CPI momentum – chart 3. <\/p>\n

Chart 3<\/strong><\/p>\n

\"\"<\/span><\/span><\/p>\n

The rate of contraction of real M1 deposits remains fastest in Italy, reflecting both weaker nominal money trends and higher inflation. Spanish positive divergence is mainly due to a much sharper recent CPI slowdown. <\/p>\n

Chart 4<\/strong><\/p>\n

\"\"<\/span><\/span><\/p>\n

Echoing the better PMI news, German Ifo manufacturing expectations rose for a third month in January. The new demand index, however, has recovered by less and fell back this month – chart 5. European cyclical equity market sectors have outperformed on soft landing hopes and are vulnerable if business surveys now stall, as suggested by monetary trends. <\/p>\n

Chart 5<\/strong><\/p>\n

\"\"<\/span><\/span><\/p>\n

—–
\nCOMMENT:
\nAUTHOR: David Cotton
\nEMAIL: mrwbartholomew@gmail.com
\nIP: 78.129.191.50
\nURL:
\nDATE: 01\/27\/2023 03:37:45 PM<\/p>\n

Not encouraging. I believe your piece from October 6th sums up the current predicament of the global economy nearly perfectly. <\/p>\n

"The risk, therefore, is that housing weakness and its lagged effects on the rest of the economy will offset any recovery impetus later in 2023 from a turnaround in the stockbuilding cycle. A rapid reversal in interest rates may be necessary to avert this scenario."<\/p>\n

We haven't had that reversal though it seems highly probable we will later in 2023.<\/p>\n

—–
\nCOMMENT:
\nAUTHOR: Rob
\nEMAIL:
\nIP: 188.211.161.184
\nURL:
\nDATE: 01\/28\/2023 09:28:56 PM<\/p>\n

Hi Simon, I\u2019m seeing someone post a chart of copper vs. US CPI, trying to suggest a 2-3 month lead, and a subsequent inflation resurgence. Interested in your take on this! Thanks!<\/p>\n

—–
\nCOMMENT:
\nAUTHOR: Roberto
\nEMAIL: we@kaught.com
\nIP: 69.84.103.212
\nURL:
\nDATE: 01\/30\/2023 12:09:49 AM<\/p>\n

Reading the tea leaves has become harder. Depressing financial news from EU cannot and will not stop America's reshoring. That seems like a secular tsunami force that may last decades and has just started. Working powerfully in the background it might help minimize the effects in the US of any EU deep recession.<\/p>\n","protected":false},"excerpt":{"rendered":"

Eurozone flash PMIs this week were less bad than expected, bolstering a growing consensus that economic prospects are improving. Monetary trends continue to argue the opposite.  The preferred narrow money measure here – non-financial M1 – fell for a fourth consecutive month in December in nominal terms. Bank lending also contracted on the month, while […]<\/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-4644","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\/4644","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=4644"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/4644\/revisions"}],"predecessor-version":[{"id":6953,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/4644\/revisions\/6953"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}