China: Larger than expected increase in new yuan loans - BBH

Analysts at BBH note that China reported a larger than expected increase in new yuan loans in December (CNY1.04 trillion), which is a three-month high. 

Key Quotes

“However, the aggregate financing pace slowed to CNY1.63 trillion from a CNY1.74 trillion.  This would seem to reflect a decline in shadow banking activity.  The onshore yuan rose 0.5% today and the offshore yuan a little less.  Although the squeeze in the Hong Kong money market rates has unwound almost fully, the fact that the offshore yuan (CNH) is trading stronger than the onshore yuan (CNY) suggests speculative pressures have not reemerged (yet).”