The continued improvements have been seen in monetary and credit dynamics since the ECB adopted an accommodating stance back in June. Indeed, M3 money supply growth recovered from a lacklustre 1.1% yoy in May, to 2.0% in August, then to 4.0% in February.
Societe Generale expects this improvement to have continued in March - bolstered by the new QE programme - with the closely followed metric probably having risen 4.7% yoy during that period (bringing the 3- month average to 4.1%).
The flow of credit to the private sector should continue to show a strong credit impulse (annual change measure as a percentage point of GDP). Short term, this strong credit impulse can be seen as supporting higher asset prices rather than higher real GDP growth.
The rebound in housing starts and capex remains indeed modest. Medium term, there is a good chance that the improvement in the outlook will give companies sufficient confidence to start investing and hiring again (the same should hold true for household consumption), although at a modest pace.
