Tightening in all but Name

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Tightening in all but Name

 

Latest weekly balance sheet data from major Central Banks show aggregate liquidity growth plummeting to 6.5% (3m ann. rate), its pre-Pandemic rate. The G4 (ex. China) equivalent has dropped to 6.2%. At this time last year, liquidity was expanding at a 54% 3m ann. clip (G4, 59%), having peaked at 95% (G4,110%) a month earlier. The recent downturn started in the US, where the monetary base is now shrinking. The slump has been compounded by the sharp slowdown in ECB and Bank of Japan liquidity growth, and liquidity contraction in other non-major Central Banks. The Bank of England is holding steady. Meanwhile, the People’s Bank of China is bucking the trend and stepping up the pace of its liquidity injections.

 

 

 

 

See our latest published research, Weekly Global Liquidity Update 2 July 2021

 

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