Effect of PBoC's monetary policy easing soften

China's monetary aggregate for October releases indicates that recent easing measures are not yet increase borrowing. New CNY loans, a component of aggregate financing, reduced from CNY 1.05tn in September to CNY513bn. 

Aggregate financing, the broadest measure of new credit growth, inched down to CNY 477bn in October from CNY1.3tn in September. This figure reached to a one year low, and below market's expectation for CNY 1.05tn. 

The fall in new CNY loans shows a tightening in banks' credit lines to traditional industries. Therefore, the continual slowdown in the manufacturing sector need to be strengthen. 

"We see monetary levers having a limited impact in reviving momentum within the real economy. Against this backdrop, the authorities are likely to step up with further fiscal support to stimulate demand", says Commerzbank.