Global Liquidity Updates
Introducing AE's Global Liquidity Heatmap
This heatmap illustrates the rate of change in global liquidity during different periods of time, comparing present liquidity levels to past data.
The heatmap embodies not only liquidity data but also changes in collateral values, which are known to affect liquidity on the global scale.
On this chart, you can easily spot high correlation between GL and Bitcoin.
China's Stimulus & U.S. Dollar Weakness in Focus
Investor risk exposure has declined due to recession fears and carry trade concerns, but liquidity continues to rise.
China is using every opportunity to stimulate its deflationary economy without overly devaluing the yuan relative to usd.
The US remains a crucial factor for global stimulus. Now, more than ever, it's important to watch the US, especially with bill issuance in play moving forward.
A weaker dollar often signals increased liquidity from other central banks, making the US a key player in this liquidity cycle.
Last week, the FED's reserve bank credit decreased by $10B. Due to collateral value increase however, our GLI displays a small uptick.
To finalize, our Liquidity Index now stands at $125.975 trillion, which is a 0.165% increase since the last report. The AE RoC remains positive.
A Rollercoaster Ride Through Global Markets
Central banks have been slow to stimulate economies, leading to market turbulence and the broader view being lost.
The journey to the moon is not always a straight line.
The unwinding of the usd-yen carry trade and recession fears have contributed to the recent sell-off in equities and risk assets.
Many are calling for an emergency rate cut by the FED, but a market bailout is more likely if conditions worsen.
Factors to consider include the US Treasury General Account at $786 billion, potential draining in the next two months, and possible economic stimulus from China
as the usd weakens against the yuan.
Our GLI stands at $125.7 trillion, a 1.45% decline from the previous report, mainly due to the MOVE index rising.
Also, our RoC remains positive despite the liquidity decrease.
Stay vigilant for positive market conditions.
Be fearful when others are greedy, and greedy when others are fearful.
