A Fork in the Road: PBoC Trending Higher; ECB, BoJ and BoE Drifting Lower, and Fed on the Cusp

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A Fork in the Road: PBoC Trending Higher; ECB, BoJ and BoE Drifting Lower, and Fed on the Cusp

 

Latest weekly balance sheet data from the World’s major Central Banks show that aggregate liquidity growth has slipped since the start of 2021 (latest 19.7% 3m ann.)

Liquidity growth, in aggregate, has been largely range-bound since August 2020, but below the surface there has been a change in direction. While the ECB, Bank of Japan and Bank of England “slowed” through the period, the US Fed and the People’s Bank of China had been moving in the opposite direction, until now. The Fed has marked the New Year by reining in liquidity growth, but the PBoC is stepping up the pace. This has coincided with Renminbi strength versus the US dollar: up by some 3.5% in the last three months and around 7% through 2020.

 

 

 

See our latest published research, Weekly Global Liquidity Update 15 January 2021

 

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