This chart helps explain why commodities are tanking

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Chinese credit growth slowed sharply in October, feeding fears over a sharp economic slowdown in the world’s second largest economy.

New data from the People’s Bank of China reveals total social financing, the broadest measure of credit growth, fell to 476.7 billion yuan in October, 63% below the level of September. It was the smallest monthly increase recorded since July 2014.

New bank lending also slumped, falling to 513.6 billion yuan against expectations for a decline to 800 billion yuan.

While a significant monthly decline, it’s not unusual for bank lending to slow towards the end of the calendar year. For instance, in October 2014, new bank lending came in at 548.3 billion yuan, down on the 857.2 billion yuan level of a month earlier.

Analysts caution the decline in social financing may have been impacted by local governments issuing debt through the newly established municipal bond market, rather than through the traditional avenue of local government financing vehicles which made a proportion of total financing.

While new bank lending and social financing missed expectations, broad M2 monetary growth accelerated, increasing at an annual rate of 13.5% from 13.1% seen in September, something that may scupper near-term expectations for further policy easing from the People’s Bank of China.

The news, following a raft of weak economic data from the nation over the past two weeks, has not been welcomed by markets.

Commodities, and commodity-linked stocks, have been hammered in recent trade. Oil, iron ore, copper – no matter where you look all are under pressure.

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