Global Liquidity Watch: Weekly Update

Liquidity Levels Recover

Central Bank liquidity has recovered from its early January dip. Collateral values have ticked higher and bond market volatility has edged lower. Added to this, the US dollar has lost some momentum. These are all liquidity-positive but more liquidity is needed. Risk asset markets, gold and cryptocurrencies react to changes in liquidity with some delay. They have recently lost momentum in response to the liquidity slowdown that started in October 2024. The current recovery if maintained will be supportive as we move towards Spring. We maintain our view that liquidity will expand further this year before peaking around Q4.