Global Liquidity Watch: Weekly Update

Global Liquidity Continues to Edge Higher

Global liquidity levels continue to edge higher. 2025 has started reasonably well. A combination of a weakening US dollar, improving collateral values and lower bond market volatility have underpinned global liquidity. Weak Central Bank liquidity growth though has constrained the upturn. Latest data show a shift. The downtrend in the US dollar has halted and bond market volatility has picked up slightly (both liquidity negative). Countering this is the improvement in Central Bank liquidity, or more precisely Fed liquidity (liquidity positive). While global liquidity is inching closer to the recent peak recorded last September, it is at best supportive rather than abundant. The loss of momentum in liquidity-sensitive risk assets and cryptocurrencies bear witness.