Quotes from Danske Bank:
- Euro area M3 money supply strengthened further in Jan, rising 4.1% y/y after increasing 3.6% y/y in Dec. The rate of increase was the fastest since April 2009. Growth in M1 money supply was also higher at 9.0% y/y in Jan, up from 7.9% in Dec. Loans to the private sector increased 0.5% y/y in Jan after turning positive in Dec.
- The progress in lending from banks reflects that on the supply side, the ECB has finished its stress tests and asset quality review, implying banks can focus on lending to the private sector. Added to this, the ECB's QE programme should lead to cheaper and more accessible credit. On the demand side, private consumption in particular is strengthening, and banks have also reported that demand for loans from enterprises is increasing.
- The credit impulse, which is important for higher GDP growth, signals GDP is increasing much faster. In yearly terms it points to growth above 2%. Overall, the increase in loans to the private sector supports our view of higher growth in the euro area. We expect GDP growth of 1.5% in 2015, which is above consensus of 1.2%.
