Global Liquidity Conditions Still Improving

Our weekly Global Liquidity monitor confirms that global liquidity conditions are still improving. This measure is derived from the shadow monetary base (see definition below). The chart below shows the 3-month annualized and year-on-year growth rate of this weekly monitor. Latest data show liquidity growing at 8.0% on a 3m ann. basis and 4.1% year-on-year.  Both are double the rate recorded just three weeks ago. This is happening despite the slowdown in shadow monetary base (SMB) growth. It reflects the continued stabilisation of collateral values and fall in bond market volatility, both of which influence credit.