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China M2: Liquidity Trap — Isn't a Shortage
Investors are positioning for a drop in money supply growth, fearing that cash is sitting idle rather than fueling inflation.
Key Points
- M2 growth expected to slow to 7.9% from 8.0%
- The issue is low velocity, not low supply
- Investors are shifting from yuan exposure to gold
What To Watch
- Actual M2 print vs 7.9% consensus
- Yuan volatility post-release
- Gold price reaction to liquidity fears