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Macroeconomic & Geopolitical

Weekly Update May 10, 2019

10 May 2019 - 4 min read

The three things you need to know this week: Results from the latest Fed Senior Loan Officer Survey, EZ Outlook, and Slowing Chinese Credit Growth.

Overview

Fed Senior Loan Officer Survey: The survey highlighted weakening demand across several lending categories, including commercial and industrial (C&I) loans, commercial real estate (CRE) loans, residential real estate loans and credit cards. Lending standards were unchanged, while terms eased on C&I loans to large and middle-market firms. Banks tightened standards across CRE loan categories—construction and land development loans, nonfarm nonresidential loans, and multifamily loans.

EZ Growth Outlook: The European Commission cut its growth forecast for the euro area economy, citing slowing global trade, weakness in the manufacturing sector and ongoing Brexit uncertainty. The 2019 GDP growth forecast was lowered to 1.2% from 1.3% in February, reflecting downwardly revised projections for Germany (to .5% from 1.1%) and Italy (to.1% from .2%).

China Credit Growth Slows: Credit data shows aggregate financing growth slowed more than expected in April. New bank loans and money supply growth both declined from March levels, while shadow banking activity continued to decline. Policy should remain supportive on broad-based and targeted levels, while further trade friction with the U.S. and the imposition of additional tariffs could shift policy priority back to easing.

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