The GLI (Global Liquidity) leading index of international capital and liquidity movements was slightly higher in July 2014 at 45.8 ('normal' range 0-100), from 44.6 in June. Developed economies have much stronger liquidity at a 62.5 index level, than Emerging Markets at 16.7. Headline global liquidity conditions are broadly unchanged over the past four months and remain a tad below average, but this disguises two major undercurrents: (1) there is an on-going switch in the direction of capital flows from Developed to Emerging Markets, even despite the fact that capital is again, as we write, quitting Russia; and (2) private sector liquidity is either weak or weakening, and Central Bank liquidity is either generally firm or strengthening.

The Global Liquidity Indexes (GLI) measure broad monetary flows through World financial markets. They are leading indicators of future asset prices and economic activity. Our 80 country GLI aggregate inched down in June 2014 to an index of 47.8 ('normal' range 0-100) from 48.3 in May. The GLI can be broken down into an Emerging Market (EM) component, which is low but managed to rise to an index of 24.1 last month and a Developed Market (DM) component, which still stands at high index levels of 65.4. The DM index dipped a tad last month but is largely unchanged since end-2013, whereas the EM index gained 3.7 points from May and is 7.8 points up over six months.