"The ECB will be fervently hoping that despite the heightened uncertainties facing the Eurozone following the UK's vote to leave the EU, bank lending to businesses and households will be lifted as its substantial March package of stimulative measures are increasingly enacted and kick in".
- HIS Global Insight
According to the European Central Bank, during the previous month the Euro zone money supply growth rose in May as well as the annual increase in loans to households improved. The broad monetary aggregate M3 jumped 4.9% on a yearly pace, following a 4.6% rise seen in April. Moreover, it was expected to reach 4.8%. Also, it is worth to point out, that both announcements rose on a faster-than-expected rate. The annual growth rate of loans to households came in at 1.6% in May, compared with 1.5% in April.
Another data revealed that the yearly advance in credit to general government reached up to 11.1% in May, from 10.3% in April. Furthermore, the expansion of credit to the private sector reached 1.3% compared to the 1.1% in April. However, loans to non-financial corporations went up 1.4% after climbing 1.2% in April. Meanwhile, the ECB has launched a raft of policy measures in order to get credit flowing.
In the meantime, the European markets faced another session of heavy losses at the beginning of the current week, being affected the unexpected result of the UK referendum on Thursday and Friday. The possibility that the UK will exit the European Union has left investors on edge. European stock market also was among the weakest performers.
© Dukascopy Bank SA