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European Money Supply Falls To Lowest Level in 3 Years

Fragile growth in the euro zone may be welcome after a prolonged recession, but any recovery is failing to show up in monetary data, with the banking sector continuing to be a drag.

Data on Wednesday showed the annual growth rate of the euro zone’s money supply — the total amount of money in circulation or existence — fell to 1 percent in December, the lowest level since late 2010.

In addition, loans to the private sector dipped 2.3 percent in December on the year before. This was the worst fall since the data started being tracked in 1991.

Falling loans and slowing growth in money supply are both trends which began in the middle of 2012. Now, the latest weak lending and money supply statistics could push the European Central Bank (ECB) to act at its upcoming policy meeting next week.

via CNBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza