Global Liquidity Watch: Weekly Update

Global Liquidity Levels Stabilise

Global liquidity levels have stabilized and are underpinned by four positive factors. (1) Central Bank liquidity which has recovered from its early January dip. (2) Collateral values (bonds) which are picking up, in part helped by (3) the loss of momentum in the US dollar. And finally (4), bond market volatility which is ebbing. Risk asset markets, gold and cryptocurrencies react to changes in liquidity with some delay. They recently lost momentum in response to the liquidity slowdown that started in October 2024. Gold and risk assets have recovered in the last few days, but they may have got ahead of themselves? More liquidity is needed.