Tag Archives: excess liquidity - 5 posts found

Chinese Excess Liquidity Rolling Over

Chinese excess liquidity does a good job of leading asset prices as well as China-related commodities. We define excess liquidity as M1 money growth minus Inflation minus economic growth. This captures how much excess money there is beyond what the…


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Financial Conditions Ease, but Growth to Remain Weak

Two of the best global leading indicators tools we have are VP’s Business Cycle Financing Index (BCFI) – which tracks financial conditions, eg are central banks easing or hiking, credit spreads widening or tightening (first chart) –  and the global yield…


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Money surges in Europe, growth to follow

If you ignore the ongoing Greek sideshow, rarely has European money growth been as accommodative as it is today. Europe has enormous structural problems of too much debt, an inflexible currency and an ageing population, but cyclical factors are very…


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Excess liquidity and money growth point to weaker second half of 2014

One of the themes we have been tracking in the past 6 months is the slowdown in global money growth and excess liquidity. The focus on the second derivative is important here. The level of growth in liquidity and money growth indicators is decent but the annual growth rate is rolling over.


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Market is likely getting ahead of itself on European equities

The composite eurozone January flash PMI showed accelerating expansion led by Germany, but the PMI readings are still only showing moderate growth, considerably below the momentum achieved, for example, in the 2009/2010 green-shoots revival. What growth we do see will be low in comparison with earlier times and if real money growth continues to lose momentum, we might even see renewed weakness.


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