The Eurozone's money supply as measured by the M3 monetary aggregate expanded at a 1% year-on-year during the month of May, according to data today from the European Central Bank (ECB). The rate of change in the total amount of credit granted to Eurozone residents was at -2.3% for the twelve months to May, versus -2.2% in the month before. 

Credit to general government was at -1.4% pace, in comparison to -0.9% in the previous month, while credit to the private sector remained unchanged at -2.5%. 

Within the latter category however, and once adjusted for loan sales and securitisations, the annual growth rate of loans was less negative at -1.4%, up from -1.6% in the month before.

The annual growth rate of loans to households decreased to -0.7% in May, from 0.0% in April (adjusted for loan sales and securitisation, the rate stood at 0.5%, compared with 0.4% in the previous month). The annual growth rate of lending for house purchase, the most important component of household loans, decreased to -0.3% in May, from 0.7% in the previous month.  

"The Eurozone's credit cycle is turning, but only very gradually.

Adjusted for some large securitisations of loans to households in May, the rate of decline of loans to households and non-financial firms eased to -1.4%, its least bad since July last year. 

[...] As with the recovery itself, the credit cycle remains weak, with loans still contracting on a year-on-year basis, albeit at a weaker pace," wrote Christian Schulz, senior economist at Berenberg in reaction to the figures