Global Liquidity Updates
Global Liquidity Continues Negative Trend, but Macro Outlook Remains Bullish
We continue to see a negative trend in Global liquidity, as pointed out by the most recent readings from our AE Liquidity Heatmap.
This is a continuum from what we have been tracking-the inability of global liquidity to hold above the positive momentum line.
Earlier in the week, we discussed the impending liquidity boost expected in Q4.
Though it may be going through some short-term blows, the macro outlook remains bullish.
The Fed seems set to add more liquidity into the system, and commercial banks have already ramped up their securities holdings.
The RoC indications continue to remain positive, suggesting there is still some resilience despite the current signals displayed within the AE Global Liquidity Heatmap.
Liquidity Boost Ahead for Bitcoin?
While the community holds its breath over a potential Trump win in November, global liquidity is gearing up for a boost - regardless of who steps into the White House.
Believe it or not, Bitcoin, the hardest asset in the world will welcome both with open arms.
The Committee for a Responsible Federal Budget has estimated the federal deficit impact for both parties.
With record debt levels, rising interest costs, and major trust funds nearing insolvency, the next administration will have no choice but to turn ON the beloved printing machine once again.
While the ECB cut interest rates last week, there's more good news from the West.
Commercial banks continue to increase their securities holdings, and the latest Federal Reserve Bank credit report shows a significant positive RoC.
It seems like the Fed is ready to play Santa in Q4, shifting the financial supertanker into easy mode and offering early Christmas gifts for the patient ones.
As for the data, our Liquidity Index saw a stable week with a $0.242 billion increase (+0.190%). The RoC metric remains positive.
AE Global Liquidity Oscillator - New Signal
As of today, the AE Global Liquidity Oscillator has flashed another negative signal, confirming the continuation of the recent downtrend in liquidity.
Earlier this week, we noted a significant drop in global liquidity due to rising bond market volatility. This negative signal indicates that the ongoing liquidity challenges remain unresolved.
However, we maintain a bullish outlook, as the US still has room for further easing. We expect other central banks to follow suit, which could present significant opportunities in the markets.
