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Analysts at Nomura suggest that China’s July money and credit data gave them an indication that credit growth was somewhat stabilised as Beijing decisively took a series of steps to add interbank liquidity, rescue the high-yield bond market and stem the shrinking of shadow banking financing.

Key Quotes

“Deleveraging does not appear to be in full stop mode yet, as evidenced by the continued fall in trust loans and entrusted loans. However, with the shift of Beijing’s policy stance towards outright stimulus, we expect aggregate financing in general and shadow banking in particular to be further stabilised and even rebound in the next couple of months. In the past, investors could sometimes become confused when facing numerous data points on money and credit each month.”