Liquidity Growth Normalises

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Liquidity Growth Normalises

 

Latest weekly balance sheet data from major Central Banks show aggregate liquidity growing at 6.9% (3m ann.), the lower end of the long-term pre-pandemic range. The G4 equivalent (ex. China) stands at 6.4%. The unprecedented monetary response to the Covid crisis looks to have run its course. The US Fed and ECB have been at the forefront of this normalisation dating from early April, and the impact of their actions is all the more significant because together they have supplied 85% of World QE during Q2 2021. The Bank of Japan has added to the squeeze since mid-June. And latterly, the People’s Bank of China has also slowed its liquidity provision.

 

 

 

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

 

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