Recap 5-07-13: Very Bullish Senior Loan Officer Survey


Late yesterday, the Federal Reserve published the results of its April SLOS. The biggest take away is that US banks substantially eased lending standards for both small and large business last quarter, at a rate we haven’t seen since the middle of the last decade, and before that, 1994: (chart from Barclay’s)

Now, one print is not conclusive evidence, but IMHO, this is a big deal. The transmission mechanism between monetary policy and the real economy has gotten greased.


  • RBA cut 25bps to 2.75%.
  1. The Bank’s forecast remains that inflation over the next one to two years will be consistent with the target.
  2. The exchange rate, on the other hand, has been little changed at a historically high level over the past 18 months, which is unusual given the decline in export prices and interest rates during that time. Moreover, the demand for credit remains, at this point, relatively subdued.
  3. At today’s meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy,

the Pentagon released a report Mon in which it directly blamed China for a surge in cyber attacks against both US military and corporate assets

Upcoming Data:

  • Wed: Canadian Housing Starts, China CPI, Australia Employment
  • Thu: UK IP, BoE, Canada New House Price Index, US Jobless Claims
  • Fri: China Money Supply, Japan Eco Watchers Survey, Canada Employment, USDA Ag report
  • Mon: Japan M2, Australia Home Loans, NAB Business Conditions, China CPI, Retail Sales, US Retail Sales
  • Tue: EU IP, German Zew,

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