Zhongjin: Several new phenomena in credit and financial data in July are worth paying attention to.

The research report of Zhongjin Company believes that there are several new phenomena in credit and financial data in July that are worth paying attention to. Firstly, social financing continues to accelerate while credit is relatively weak, reflecting to a certain extent the trend of private deleveraging and government leveraging in the latter half of the financial cycle, as well as the influence of seasonal factors. Secondly, although credit data in July is weak, loan interest rates remain low, which may reflect a trend of changes in the operating philosophy of financial institutions, without simply pursuing "quantity over price". Thirdly, the active financial investment activity or the significant increase in non-bank deposits are important factors supporting the vibrant performance of the stock market. Fourthly, fiscal expenditure is an important driver supporting the growth of M2. Fifthly, the month-on-month growth rate of M1 in the past two months is relatively high, influenced by the active financial investment and possibly related to the low base caused by tariff disturbances in April-May. Under normal circumstances, the annual growth rate of M1 this year will be higher than last year, but there is limited room for further substantial increases in the growth rate of M1. Overall, it is likely that the year-on-year growth rate of monetary supply in the third quarter will continue to improve, and the sustainability of this trend after October will depend on the strength of countercyclical policies.