WEEKLY LIQUIDITY UPDATE Global Liquidity Update Global Liquidity slipped to US$193.62 trillion in the latest data. The 3-month annualised growth rate eased to 6.5% 12-month growth moderated to 5.7% Latest data confirm that headline liquidity has hit a plateau at near-record highs. Both short-term and annual growth rates continue to decline, indicating a clear moderation in liquidity momentum. Collateral dynamics remain supportive but are likely moderating as evidenced by lower bond values and a slight rise in volatility. Underlying liquidity creation as measured by the Shadow Monetary Base (SMB) is weakening, despite renewed support from the PBoC. Nominal SMB has slipped below year-ago levels and short-term momentum remains negative. Global Liquidity (US$ Trillions) Latest level: US$193.62T (↓ from US$193.80T last week; ↓ from US$194.04T two weeks ago) 12-month growth: 5.7% (↓ from 6.3% last week; ↓ from 7.0% two weeks ago) 3-month annualised growth: 6.5% (↓ from 10.3% last week; ↓ from 13.3% two weeks ago) Interpretation Headline liquidity remains elevated at US$193.62T but has continued to edge lower over recent weeks. Annual growth slowed to 5.7% , while the 3-month annualised growth rate fell to 6.5% , extending the loss of momentum evident since the recent peak. Although liquidity conditions remain broadly supportive, the pace of expansion has moderated noticeably. Shadow Monetary Base (SMB) Latest level: US$109.64T (↓ from US$110.22T last week; ↓ from US$109.95T two weeks ago) 12-month growth: -0.1% (↓ from 0.6% last week; ↓ from 0.3% two weeks ago) 3-month annualised growth: -1.1% (↑ from -1.4% last week; ↓ from -0.8% two weeks ago) Interpretation SMB remains the weakest component of the liquidity picture. The level fell to US$109.64T in the latest data and is now 0.1% below its level a year ago. While short-term momentum improved slightly from last week's reading, the 3-month annualised growth rate remains negative at -1.1% , signalling continued weakness in underlying liquidity creation. The contrast between declining SMB growth and still-elevated headline liquidity suggests that liquidity conditions continue to rely heavily on supportive financial market dynamics rather than broad-based monetary expansion. Collateral Multiplier & Volatility Mechanism Volatility ↓ → Haircuts ↓ → Multiplier ↑ → Liquidity ↑ Latest multiplier: 1.76 (unchanged from 1.76 last week; unchanged from 1.76 two weeks ago) Interpretation The collateral multiplier remained stable at 1.76 . Collateral conditions therefore continue to provide support to liquidity creation, offsetting some of the weakness evident in underlying monetary measures. However, with the multiplier unchanged for several weeks, collateral dynamics are no longer providing additional impetus to headline liquidity growth. Key Takeaways Global Liquidity stood at US$193.62T , remaining historically elevated despite declining for a third consecutive week. 3-month annualised growth slowed to 6.5% from 10.3% the previous week. 12-month growth moderated to 5.7% from 6.3% . SMB weakened, with annual growth turning slightly negative to -0.1% . SMB short-term momentum remained negative at -1.1% , despite a modest improvement from last week. The collateral multiplier remained stable at 1.76 , continuing to support liquidity conditions. Overall liquidity conditions remain supportive but momentum has clearly softened. The divergence between relatively strong headline liquidity levels and weak underlying monetary growth remains a key feature of the current environment.