Explain the reasons why credit and M2 growth run counter to each other and what impact the economy and stock bonds have-

Explain in detail the reasons why credit and M2 growth run counter to each other. What is the impact of the economy and stock bonds?
Original title: Explain in detail the reasons why credit runs counter to M2 growth, and how will it affect the economy and stock bonds?  In November, financial data generally improved, social integration, and credit data rose significantly from the previous quarter, in line with random rules; most of the changes were mild.However, a phenomenon that has caused concern is that the rebound of supplementary RMB loans and the fall of M2 occurred at the same time. How exactly did this divergence result?  Two factors contributed to the divergence of credit and M2 trends. Specifically, new RMB loans were added in November1.39 trillion, an increase of 140 billion previously, exceeding market expectations.26 trillion yuan; M2 value added 8 quarterly.2%, lower than market expectations of 8.4%, down from 0 last month.2 averages.  Market analysis believes that one of the reasons for the increase in the two data is that the local government bond maturity repayments.  Xie Yunliang, the chief macro analyst of Minsheng Securities, told First Financial News that in November, local government bonds were repaid at a rate of 86.5 billion yuan, with an issue volume of 45.8 billion yuan, and the balance was reduced by about 40 billion yuan. Correspondingly, banks’ claims on local governments decreased.From the source of M2, M2 = foreign exchange account + banks ‘external debts; non-divided deposits of broad money; bonds; paid-in capital; and others. The reduction of banks’ claims on local governments naturally caused M2 to fall.”At the end of November, the growth rate of M2 and the reduction in fiscal expenditure at least decreased. This month, fiscal deposits decreased by nearly 420 billion compared with the same period of the previous year, directly driving the growth rate of M2 by 0.22 averages.Budget expenditure surplus for the month increased by 8.4%, an increase of 0 from last month.The two statutory regulations, mainly because non-bank financial institutions ‘deposits increased by about 390 billion yuan, or related to the current tight supervision affecting non-bank institutions’ capital investment.Wang Qing, chief macro analyst of Dongfang Jincheng, told reporters.  Another more critical factor lies in the creditization of off-balance sheet financing.At the beginning, Sheng Songcheng, the former director of the Department of Harmonization and Management, told the First Financial Reporter: “Transfer deleveraging, strengthened financial supervision, and off-balance-sheet financing continue to shrink. Banks began to use on-balance-sheet loans to partially take part in shadow banking.Financing is not counted in the balance sheet of commercial banks. After returning to the balance sheet, it is reflected in the increase of new RMB loans in M2, but M2 does not increase overall.”Specifically, the three items of entrusted loans, trust loans and undiscounted acceptance bills are called” shadow banks “. The previous merger will affect M2, but acceptance bills are non-monetary credits of banks, so they will not increase the money supply.According to the data in November, although the three off-balance sheet declines have improved, the main boost is the undiscounted bank acceptance bills that do not contribute to M2.  M1 is still low, but the data has improved marginally. From the overall data, the situation is still improving marginally.Sheng Songcheng told reporters.  The reason why some people think that the improvement is not significant enough is that in November, the social financing and credit data rebounded obviously, but at the same time, the changes were mild, and the growth rate of M2, loans and social financing showed a pattern of “one level and two decreases”;In November, the short-term loans of newly-added enterprises increased by 282.1 billion yuan and an increase of 178.3 billion yuan. The increase was significantly larger than that of medium- and long-term loans of enterprises. Combined with the increase in external bill financing of the current monthly statement, “It reflects the existence ofThe behavior of short-term loans and bill impulse, to a certain extent, confirmed the bank’s risk appetite and the long-term investment and financing willingness of enterprises.Wang Qing said.  ”In spite of this, overall, through the continuous credit widening of banks, the substitution effect of local special debt has been strengthened, and the subsequent real economic situation is still expected to try to stabilize.”Sheng Songcheng said.He explained that compared to M2, M1 is actually a very important indicator, showing the vitality of the real economy.Generally speaking, when M1 is high, the value of the real economy is vital.At the end of November M1 increased by 3 per year.5%, 0 higher than the end of last month.The two averages have improved, and the “M1-M2 Scissors Difference” narrowed compared with last month.  Exceptions may occur in 2016.At that time, M1 was abnormally high, but it also represented that the structure of the real economy must be healthy.Sheng Songcheng said, for example, in June 2016, the annual growth rate of M1 was as high as 24.6%, M2 growth rate is 11 in ten years.8%, the difference between the two reached a record high.The reason why M1 was 北京男士spa会所 abnormal at the time was that real estate sales had grown rapidly since the first quarter, with a growth rate of 40% in several years. Real estate sales would cause deposits to be transferred from the household sector to the corporate sector, including developers, supplier accounts, etc., so M1At the same time, M1 is mainly corporate demand deposits. Excessive demand deposits mean that companies are holding currency to wait and see, and invest cautiously without necessarily finding good projects, but the current situation is very different from that year.  The structure continues to affect the market geometry?  According to the financial data, most of the institutions interviewed by CBN reporters believe that the short-term internal monetary policy response is expected to be dominated by structural tools.  ”Relevant sources said a few days ago that we will further increase precision drip irrigation, increase structural adjustment guidance, guide small and medium banks to return to the grassroots, serve entities, support the development of private and small and micro enterprises, and we expect to reduce the tool space of the internal monetary policy scale.Limited, structural tools will play a huge role. After the CPI high point in January next year, the space for dimensional tools is expected to increase.Xie Yunliang told reporters.  Zhang Jun, chief economist of Morgan Stanley Huaxin Securities, told reporters that in order to solve the problem of “expensive financing”, while adjusting the one-year LPR interest rate twice a year, the MLF and OMO interest rates have been reduced to strive forWhile optimizing the currency integration mechanism, it is beneficial for enterprises to effectively realize the reduction of financing costs.However, it still takes time for companies to recover capital expenditures. It is expected that under the guidance of “a policy framework in which macro policies need to be stable and micro policies need to be alive,” the policy layer will further guide the policy from the two goals of “quantity” and “price”, and be cautious in timing.Considering the reduction in the price and quantity of monetary policy, the focus of the policy efforts is on guiding financial institutions to increase mid- and long-term financing of manufacturing and private enterprises.  As far as the bond market is concerned, many traders generally said that adding positions still need to wait and see.Earlier, due to the OMO and LPR reductions, the 10-year government bond yield was once close to 3.Around 4% fell back to 3.Near 17%, but recently at 3.Close to 2%.Lou Chao, a UBS asset management bond fund manager, told reporters, “But currently 3.The level of around 2% is no longer high, and the substantial increase in interest rates on debt may have to wait until the attitude changed in the early Ming Dynasty to become clearer.”However, he also said that the operation of a democratic breakthrough also proved that monetary policy will not be excessively restrained by this factor, so that pork prices will fall with a high probability next year and gradually become moderately accommodative.  As far as the stock market is concerned, Morgan Stanley also noticed that the downward pressure of the Chinese economy in the third quarter still exists, but in the short term, internal infrastructure investment has stabilized and the global economy may enter the third recovery since 2008 in the first quarter of next year.Under the circumstances, the improvement of internal and external demand may drive the rapid and rapid rise in interest rates of PPI and industrial enterprises, and it is also expected to correct the weak drag on real estate investment. Therefore, most institutions generally believe that the cycle sector has a certain probability.  Lu Wenjie, BlackRock China investment strategist, recently told First Financial News that China’s economic transformation is gradual, and despite the expected increase in corporate profits, it remains at a high level.It is expected that in the context of a mild recovery in 2020, the recovery of the manufacturing sector will drive the rebound of the underestimated cycle sector, and the 5G sector has certain opportunities.