Jan. results +4.7% y/y
+5.0% 3-month average y/y
+10.0% private sector credit growth
+0.2% sa m/m
MNS survey median: +4.8% y/y
+4.9% 3-month average y/y
MNS survey range: +4.6% to 5.0% y/y
+4.8% to 5.0% 3-month average y/y
Dec. results: +5.2% y/y (revised from +4.9%)
+5.1% 3-month average y/y (revised up from 5.0%)
+10.2% private sector credit growth
(revised from +10.3%)
+0.4% sa m/m (revised from +0.1% m/m)
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FRANKFURT (MktNews) - The eurozone annual M3 money supply growth rate slowed faster than most analysts expected in January, though the 3-month rate fell less than expected due to a sharp upward revision in December data, according to European Central Bank figures released Wednesday.
Private sector credit growth remained high, though it, too, declined from December.
The 3-month average M3 growth remained at 5.0% in January, after December was revised up to 5.1%, and thus remains above the 4.5% reference rate set by the ECB M3 growth this year.
Still, if the slowdown in the year-over-year rate in January is repeated in February, the 3-month rate could decline rapidly in coming three months, due in large part to favourable base effects. However, due to weak M3 growth from May to September last year, the base effect will turn unfavourable and could lead to a rebound in the 3-month growth rate in the early summer.
Some analysts argue that if M3 growth remains at the recent 0.4% month-over-month rate in coming months then the 3-month rate will fall to the reference value, or even below, later this spring. Below-target M3, combined with the expected decline in harmonised CPI to less than 2% later this year should give the ECB leeway to cut rates, many analysts say.
In January, the seasonally adjusted month-over-month increase was only +0.2%, though December was revised sharply higher to +0.4% from the originally reported +0.1%. If the lower m/m growth rate is confirmed in February, it could signal a slowing trend in M3 growth, which could bring the 3-month rate down still faster in the near-term.