Euro zone M3 money supply slowed again more than expected in October. The yearly figure slowed from 1.8% Y/Y to 0.3% Y/Y, while the consensus was looking for an outcome of 0.8% Y/Y. The less volatile three months’ average stayed unchanged at a downwardly revised 1.6% Y/Y. Looking at the details, loans to non-financials dropped by 1.2% Y/Y (from -0.2% Y/Y) and loans to households fell by 0.1% Y/Y (from -0.3% Y/Y). Nevertheless, the monthly flow data showed another increase in loans to households (10 from 14), while loans to non-financial corporations dropped further (-17 from -9). The further increase in household lending is encouraging, as household lending usually bottoms at the same time as the economy, contrary to corporate lending that lags the cycle by three quarters.
Other: UK retail sales grew at their fastest pace in two years
In the UK, the CBI quarterly distributive trades report showed a further improvement in optimism. In November, the headline index rose to 13 (from -2 in August). The employment index rose from -41 to -27; but remains firmly in negative territory. Also the monthly survey showed a significant improvement with increases in sales (13 from 8), volume of orders (12 from -3) and sales for time of the year (-5 from -2). Retailers became also more optimistic about the future. The CBI added that retail sales grew at their fastest pace in two years, and high street is expecting growth to pick up further in the run-up to Christmas.
