WEEKLY LIQUIDITY UPDATE Overview Global Liquidity rose to US$193.3 trillion last week, according to the latest data. The 3‑month annualised growth rate held at 8.7% 12‑month growth increased to 7.9% While headline liquidity is rising, the expansion remains narrowly driven by US Fed and Treasury policy , with underlying liquidity conditions still fragile. In particular, the Shadow Monetary Base (SMB) is held in check by weakening PBoC liquidity and ongoing Bank of Japan, ECB and Bank of England QT , highlighting a divergence between surface‑level strength and core liquidity dynamics. US dollar strength is a further headwind. Global Liquidity (US$ Trillions) Latest level: US$193.29T (↑ from US$193.16T last week; ↑ from US$192.43T two weeks ago) 12‑month growth: 7.9% (↑ from 7.5% last week; ↑ from 7.0% two weeks ago) 3‑month annualised growth: 8.7% (unchanged from 8.7% last week; ↑ from 7.8% two weeks ago) Interpretation Headline liquidity remains on an upward trajectory, with levels and annual growth continuing to strengthen . Short‑term momentum is firm rather than accelerating further , suggesting the recent improvement is consolidating at elevated levels . The overall backdrop remains supportive, but the drivers are still concentrated rather than broad‑based . Shadow Monetary Base (SMB) Latest level: US$110.14T (↑ from US$109.50T last week; ↑ from US$109.40T two weeks ago) 12‑month growth: 2.3% (↑ from 1.8% last week; ↑ from 2.2% two weeks ago) 3‑month annualised growth: –7.3% (unchanged from –7.3% last week; ↑ from –8.8% two weeks ago) Interpretation SMB showed a modest improvement in level and annual growth , but short‑term momentum remains deeply negative . The slight pickup in annual growth suggests some stabilisation However, negative 3‑month momentum indicates ongoing contraction in underlying liquidity creation This continues to signal a fragile foundation , with SMB dynamics still not confirming the strength seen in headline liquidity. Collateral Multiplier & Volatility Mechanism Volatility ↓ → Haircuts ↓ → Multiplier ↑ → Liquidity ↑ Latest multiplier: 1.75 (↓ from 1.76 last week; ↑ from 1.73 two weeks ago) Interpretation The collateral multiplier edged slightly lower on the week , though it remains elevated relative to recent levels . Declines in bond market volatility (MOVE Index) have supported a rise in the multiplier The recent stabilisation suggests less incremental support from collateral dynamics at the margin While still supportive, the multiplier is now contributing less additional upside impulse than in prior weeks. Key Takeaways Global Liquidity rose to US$193.3T , with 12‑month growth strengthening to 7.9% Short‑term momentum remains firm at 8.7% , but is no longer accelerating SMB improved modestly , with annual growth rising to 2.3% , but: 3‑month momentum remains sharply negative (–7.3%) Collateral support softened slightly , with the multiplier easing to 1.75 The overall liquidity backdrop remains supportive but narrowly driven , with underlying conditions still fragile