June sa M3: +3.2% y/y
M3 sa 3-mo avg: +3.0% y/y
SA private loans: -0.2% y/y

MNI survey median:
June sa M3: +2.9% y/y
M3 sa 3-mo avg: +2.8% y/y
SA private loans: -0.3% y/y

MNI survey range:
June sa M3: +2.5% to +3.1% y/y
M3 sa 3-mo avg: +2.7% to +3.4% y/y
SA private loans: -0.3% to -0.2% y/y

May sa M3: +3.1% y/y
M3 sa 3-mo avg: +2.8% y/y
SA private loans: -0.1% y/y
—

FRANKFURT (MNI) – Loans to the Eurozone’s private sector continued
to trend downward on the year in June, while M3 broad money supply rose
faster than expected, the European Central Bank reported on Wednesday.

Private sector loans fell 0.2%, double the rate expected and
accelerating the decline in overall credit extended to the private
sector to -0.4% from May’s -0.2% rate. After adjusting for sales and
securitisations, the rate of loan growth slowed to 0.3% in June from the
previous period’s 0.5%.

Loans to households stood at 0.3%, with mortgage loans – the most
important component of consumer loans – also stable at +0.8% on the
year.

The ECB’s latest Bank Lending Survey (BLS) revealed a further
tightening in credit standards for mortgages in 2Q and suggested this
would continue at a more moderate pace in 3Q.

Over the same period, the fall in overall household demand for
credit picked up speed, driven in large part to falls in both durable
goods spending and morale, the survey showed.

Turning to non-financial corporations, the ECB’s M3 report showed
loan developments turning negative to -0.6% on the year in June after
stabilizing in May.

Between April and June, BLS respondents reported broadly steady
credit tightening compared to 1Q and expected little change in 3Q.

Broad money (M3) was up 3.2% on the year, up from both 3.1% in May
and median forecasts of +2.9%. As a result, the three-month moving
average rose to +3.0%, still well below the ECB’s price stability
guideline of +4.5%, and signalling subdued price pressures.

Narrow money (M1) climbed 3.5% from May’s 3.3%, while short-term
deposits other than overnight deposits stood at +2.3%. Over the same
period, marketable instruments vaulted 5.1% y/y from May’s 4.5%
increase.

–Frankfurt newsroom +49 69 720 142; e-mail:frankfurt@marketnews.com

[TOPICS: M$$EC$,M$X$$$,M$XDS$,MT$$$$,MTABLE]