Emerging Markets Latest GLI, April 2015

Emerging Market Liquidity rose again in March 2015, reinforcing an uptrend in flows that started around the second half of 2014. The EM Liquidity Cycle looks to be in a Rebound phase. Thus, the EM component of our GLI™ (Global Liquidity Index) touched 29.9 at end-March (‘normal’ range 0-100) from 19.0 at end-February 2015. Although the trend is up, the previous two months encountered some unusually sharp downward index revisions following the re-statement of Asian Liquidity data for January, largely we suspect because of timing issues ahead of the Chinese New Year. The new data suggest a less aggressive recent trend in PBoC easing. Even so, we still see a strong upward direction, fuelled by the current severe Chinese economic weakness. Chinese investors appear to agree that more money is being pumped in.