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Chinese M1 growth looks bad for manufacturing

Yearly M1 growth in China was 0% (in real terms it’s even uglier due to high pig/food prices) in January and while this could a blip driven by seasonality due to Lunar New Year, it still can’t be seen as a positive signal for the global PMI. More stimulus is likely needed to re-ignite the M1 momentum in China.

The PBoC already did some easing this week but maybe reserve requirement cuts are coming up soon again? Social financing also reached a new monthly all-time high, so loads of stimulus measures are coming – a ketchup effect is likely at some point in H2, but we have yet to see any signs whatsoever of it.

Chinese M1 growth looked oddly weak in January. A signal to worry about?


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