Eurozone: Bank lending slowing down, conditions set to tighten – ABN AMRO

Sandeep Kanihama FXStreet Contributor

Aline Schuiling, senior economist at ABN AMRO, points out that the recent ECB data suggest that growth in loans to non-financial companies has slowed down in the course of last year and should lose further momentum in the coming months.

Key Quotes

“The annual growth rate in bank loans to companies (adjusted for sales and securitization) has declined from levels above 4% during the period June-September 2018 to 4.0% in December 2018. The three-month moving average monthly flow in these loans slowed down from levels close to EUR 17bn in the first half of 2018, to levels of around EUR12bn in December.”

“If the monthly flows would remain close to this level, the annual growth rate would fall to around 3% in the final months of this year. However, the flow will probably soften further. Indeed, although the most recent bank lending survey (BLS) shows that bank in the eurozone, on aggregate slightly eased bank lending standards in the final quarter of 2018, they expected to tighten them in the first quarter of 2019.”

“In addition, given that developments in the bank lending tend to lag economic activity, it is likely that these trends will deteriorate going forward. Overall, we think that the early data on bank lending and the outlook supports the view that the ECB will soon announce a new (T)LTRO.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

GBP/USD remains slightly bid near 1.3300

GBP/USD now advances marginally and manages to dispute the 1.3300 region on Tuesday. Indeed, Cable regains some balance on the back of the lacklustre performance of the Greenback, all preceding the Fed’s meeting on Wednesday and the BoE’s gathering on Thursday.

EUR/USD recedes from tops, back below 1.1400

EUR/USD manages to set aside part of the recent weakness and clinches decent gains on Tuesday. Indeed, spot keeps the trade below the 1.1400 mark amid acceptable losses in the US Dollar, all following rising optimism of a US-Iran deal and steady caution prior to the FOMC gathering on Wednesday.

Gold bounces on poor US data

Gold remains under marked downside pressure on Tuesday, although the $4,000 zone per troy ounce emerges as a decent support for now. The precious metal’s pullback comes despite the modest losses in the US Dollar in a context of easing geopolitical tensions ahead of the key Fed event on Wednesday.

XRP falls toward $1.00 despite dwindling exchange reserves

Ripple (XRP) continues to trade under increasing pressure on Tuesday. This marks the second consecutive day of declines, reflecting broader risk-off sentiment as investors appear to shift gears in anticipation of the Federal Reserve (Fed) interest rate decision. On Wednesday, the Federal Open Market Committee (FOMC) is widely expected to leave interest rates unchanged in the 3.50%-3.75% range.

Warning signs in the stock market: Is this the top, or just a very short fuse?

Overnight, South Korea's Kospi fell more than 10%, SK Hynix lost close to 15% and Samsung Electronics lost 13%. Into that, Dow Jones Industrial Average futures traded up around 1% on paint and soft drinks, and S&P 500 futures sat roughly flat. An index that absorbs a memory-chip panic and prints nothing is not a calm market.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.