China’s July new loans fall to 825.5 bln yuan, but higher than f’cast
Chinese banks extended 825.5 billion yuan ($123.7 billion) in net new yuan loans in July, above analysts’ expectations. Analysts polled by Reuters had predicted new yuan loans of 800 billion yuan, down sharply from 1.54 trillion yuan in June. Broad M2 money supply (M2) in July grew 9.2 percent from a year earlier, central bank data showed on Tuesday, missing forecasts for an expansion of 9.4 percent and compared with June’s 9.4 percent. Outstanding yuan loans at the end of July grew 13.2 percent from a year earlier. Analysts polled by Reuters had expected outstanding loans to rise by 13 percent, after June’s 12.9 percent. China’s banks extended a record 12.65 trillion yuan in loans in 2016 as the government encouraged credit-fueled stimulus to meet its economic growth target.
German challenge to ECB asset buys sent to European Court
The European Central Bank may be violating laws on monetary financing in its 2.3 trillion euro ($2.7 trillion) asset purchase programme, Germany’s constitutional court said on Tuesday, and it asked Europe’s top court to make a ruling. In the biggest challenge yet to the ECB’s unprecedented effort to revive growth, the court said bond buys under the scheme may go beyond the bank’s mandate and inhibit euro zone members’ activities. “Significant reasons indicate that the ECB decisions governing the asset purchase programme violate the prohibition of monetary financing and exceed the monetary policy mandate of the European Central Bank, thus encroaching upon the competences of the Member States,” the court said. It said it would ask the European Court of Justice to review the programme. The ECB acted swiftly to defend the scheme.
U.S. retail sales post biggest increase in seven months
U.S. retail sales recorded their biggest increase in seven months in July as consumers boosted purchases of motor vehicles and lifted discretionary spending, suggesting the economy continued to gain momentum early in the third quarter. Retail sales for June and May also were revised higher, which should help to assuage concerns about consumer spending, But persistently sluggish wage growth has pushed Americans to dip into their savings to fund spending. Economists say wage growth has to pick up to sustain consumer spending. “American shoppers flocked to the malls and even department stores in July, suggesting consumers are well-positioned to propel the economy forward in the second half of the year,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. The Commerce Department said on Tuesday that retail sales jumped 0.6 percent last month, the largest gain since December 2016. June’s retail sales were revised to show a 0.3 percent gain instead of the previously reported 0.2 percent drop.