Eurozone: Money supply and lending growth accelerated back to 5% in December - BBH

Research Team at BBH notes that the ECB reported December money supply and lending figures and after year-over-year growth slowed below a 5% pace in October and November, it accelerated back to 5% in December.  

Key Quotes

“Lending also improved slightly.  Credit extension to non-financial businesses rose 2% from 1.9%.  Lending to households increased to 2.3% from 2.1%.  Improving credit conditions and rising price pressures may keep the hawks pressing for more tapering soon.”

“Next week's preliminary January CPI may provide more ammunition.  Recall that the aggregate headline rate jumped to 1.1% in December from 0.6% in November.  It is expected to have risen toward 1.5% in January.  However, the increase is largely a function of energy prices.  The core rate is expected to remain at 0.9%.  The trough was near 0.6%.”

“After testing yesterday's low (a little below $1.0660) in late Asia turnover, the euro turned bid in Europe.  The fate of the euro's five-week uptrend will depend on the North American session. The euro finished last week a little above $1.07.  The high yesterday afternoon in the US was almost $1.0705.  The intra-day technical readings suggest that if that area is violated, it is unlikely to spur a strong advance.”