What's going on?

Data out on Monday measured the amount of money trading hands in Europe, but you�ll have to look real close to spot it.

What does this mean?

The European Central Bank (ECB) measures the amount of money circulating around the eurozone, which includes folks� deposits, loans, and savings. And this July, that cash was down 0.4% from the same time last year � the first time it�s shrank since 2010. More often than not, smaller numbers mean consumers are borrowing less. No surprises there, then: today�s higher interest rates are making borrowing more expensive. So without as much cash in their pockets, Europeans are spending less. And in a bid to keep money coming in, stores and services will likely start pulling down their prices. That�s not necessarily a bad outcome, though: the ECB�s rate hikes were designed to calm heady inflation, and this could be a sign that the plan�s in motion.

Why should I care?

For markets: Europe needs a break.
In theory, Europe’s shrinking cash piles could hint at lessening inflation. We won�t know for sure until Thursday, though, when August�s eurozone inflation figures are released. That data will be a chunky talking point when the ECB debates future hikes at its September meeting. And while the decision�s still anyone�s guess, one takeaway�s for sure: Europe�s economy is slowing down, and the ECB will need more than a pause in hikes to jolt it back to life.

Zooming out: America�s close� ish.
Thing is, central banks will only start slicing rates when they�re absolutely sure inflation�s in check. Right now, the US is closest. But still, at the Federal Reserve�s latest meeting, inflation was deemed too high to pause rates. In fact, officials are open to another hike instead. So don�t hold your breath if you�re waiting for lower rates to push stocks into a rally or bring down your mortgage.