April Update - Latest GLI™ (Global Liquidity Index)

by Michael J. Howell17. April 2015 15:06

The Global Liquidity Index (GLI™) increased in absolute terms to 36.7 from 29.7 in February ('normal' range 0-100).

There were some unusual and hefty downward revisions to past data, largely across Emerging Asia, and notably for January 2015, where it appears that the timing of the Chinese New Year distorted the original estimates.Overall, World liquidity conditions remain sub-par, with the index at or below average now for seven months and so providing underlying support to bond prices. Moreover, Developed Markets’ Liquidity (45.9) is sliding from high levels and liquidity in Emerging Markets (26.2) is rebounding from low levels. The picture is consistent with a slowing, but not recessionary, World economy, with now better chances of some business upturn six months ahead. Judging from liquidity, the best we can hope for is a continuing ‘risk-on’ investment environment in the Eurozone and Emerging Markets, and no shift to ‘risk-off’ in the US.



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