China June M2 money supply +8.3% from year ago (poll +8.1%)

China June M2 money supply +8.3% from year ago (poll +8.1%)

China's June M2 money supply growth, as indicated by a Reuters poll, is expected to reach 8.1% year-over-year (y/y), an increase of 0.2 percentage points from May's figure [1]. This growth is largely attributed to a significant increase in new yuan loans and a sustained trade truce between China and the United States.

The poll suggests that China's banks issued 1.8 trillion yuan ($250.69 billion) in net new yuan loans in June, tripling the amount from May's 620 billion yuan [1]. This surge in lending is believed to have been driven by front-loaded public funding and a strong demand for corporate loans, which have exceeded household loans. The trade truce, which temporarily halted a bruising tariff war, has also contributed to the positive lending environment [1].

The broad M2 money supply, which measures cash in circulation and various types of deposits, is expected to have increased by 8.1% y/y in June, up from the 7.9% growth in April [1]. This growth indicates a significant increase in the overall money supply, which can have implications for inflation and economic activity.

However, it is essential to consider the broader economic context. Despite the positive lending figures, China's manufacturing activity shrank for the third consecutive month in June, and producer deflation deepened to its worst level in almost two years [1]. These indicators suggest muted business sentiment and weak domestic demand, which could curb economic growth despite the monetary easing measures introduced in May.

The M2 money supply growth in June is a critical metric for investors and financial professionals to monitor. It provides insights into the liquidity conditions in the economy and can influence stock prices, cryptocurrency valuations, and other financial assets. Understanding the different types of money supply measurements—M0, M1, M2, and M3—is crucial for making informed investment decisions [2].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3T50QC:0-china-s-june-lending-seen-tripling-as-trade-truce-holds/
[2] https://www.mindmathmoney.com/articles/money-supply-explained-understanding-m1-m2-m3-and-how-they-drive-markets-in-2025