In January, the Eurozone experienced a notable shift in its financial landscape, with the M3 money supply annual growth rate hitting a minimal 0.1%, a figure that fell short of the forecasted 0.3% and matched the previous rate. Concurrently, loans to households maintained a steady rate of 0.3%, aligning with previous figures. Loans to non-financial corporations saw a slight decrease to 0.2% from 0.4%. The European Central Bank (ECB) highlighted these changes, emphasizing the reduction in private sector deposits and an increase in investments in less liquid assets, with M1 shrinkage accelerating to -8.6% YoY and the rise of M3 halved to 0.1% YoY. This financial shift comes in the wake of the ECB posting its first annual loss since 2004, amounting to 1.3 billion euros, despite drawing on 6.6 billion euros from its risk provisions, largely due to the impact of higher interest rates on the central bank's securities holdings.
The ECB last week announced posted its first annual loss since 2004, of 1.3 billion euros, even as it also drew on its own risk provisions of 6.6 billion euros, as higher interest rates hit central banks’ securities holdings, per CNBC.
OUCH! #ECB money supply shrank in January as private sector moved its money back out of deposits into less liquid assets while net lending to households rose only slightly & lending to comps declined. Shrinkage of M1 has accelerated to -8.6% YoY, Rise of M3 halved to 0.1% YoY. https://t.co/vmNrXCuTki
🔴 EUROZONE LOANS TO HOUSEHOLDS ACTUAL 0.3% (FORECAST -, PREVIOUS 0.3%) $MACRO
How did euro area bank lending and money supply evolve in January? How do they compare with December’s figures? Find out more in the press release https://t.co/ae6cp171n0 https://t.co/KpjnpsS6Y3
🔴 EUROZONE MONEY-M3 ANNUAL GROWTH ACTUAL 0.1% (FORECAST 0.3%, PREVIOUS 0.1%) $MACRO
Eurozone M3 Money Supply (Y/Y) Jan: 0.1% (est 0.3%; prevR 0.2%)
🇪🇺 Europe M3 Money Supply (YoY) (Jan) $EUR Actual: 0.1% 🔴 Expected: 0.3% Previous: 0.1%
🇪🇺 Europe Loans to Non Financial Corporations (Jan) $EUR Actual: 0.2% Previous: 0.4%