New loans picked up on PBoC’s monetary easing

China's financial institutions extended trn new loans in September, up from CNY809bn in the prior month and higher than market expectations. 

Notably, this is the highest loan extension in September in record, suggesting that the Chinese authorities intend to accelerate credit growth to boost the economy. In the meantime, aggregate financing was CNY1.3trn in September, also higher than market expected. Data released so far including trade and inflation figures indicate that the growth momentum remains soft, pointing to a sub-7% growth rate in Q3. 

"Given the sluggishness of the economy, further monetary easing can be expected. However, the ratio between M2 and GDP has picked up again since beginning of this year and has already exceeded 205%, a record high", says Commerzbank.