WEEKLY LIQUIDITY UPDATE Global Liquidity slipped again last week down to US$188.9T , according to the latest flash estimates. Short‑term momentum has softened, with the 3‑month annualised growth rate registering 4.3% - well below the 6.0% pace seen two weeks ago. The decline reflects ongoing USD recovery, weaker collateral values and rising bond market volatility. The 12‑month growth rate also moderated, falling to 7.4% from 8.1% a week earlier as the base effect from last year’s liquidity downturn continues to fade. Liquidity levels remain elevated but have likely peaked. Weakening liquidity conditions will weigh negatively on risk asset markets 1. Global Liquidity (US$ Trillions) Latest level: $188.89T , down from $189.09T last week and below the $189.30T level of two weeks ago 12‑month growth: 7.4% , down from 8.1% 3‑month annualised growth: 4.3% , up modestly from 3.9% , but still below the 6.0% rate recorded two weeks earlier Interpretation: liquidity is drifting lower, with trend deceleration intact. 2. Shadow Monetary Base (SMB) Latest level: $109.37T , down from $110.16T 12‑month growth: 3.4% , down from 4.2% 3‑month annualised growth: 0.5% , sharply below 3.4% last week and 7.7% two weeks prior Interpretation: SMB deterioration has accelerated, driven by weaker collateral valuations and currency translation effects. 3. Collateral Multiplier Bond‑market volatility has increased: MOVE index: hit 95 at the end of last week, well below the April 2025 high (137.3), but still consistent with a mild tightening impulse. Key Takeaways Global Liquidity softened again , with both headline levels and annual growth slowing USD strength, weaker collateral values and rising bond volatility remain the dominant tightening forces PBoC liquidity injections and stable Fed flows continue to act as stabilisers SMB weakened further , reflecting falling collateral values and currency effects Collateral multiplier rose , but due to a shrinking SMB — a signal of fragility rather than strength