DECODE Global Liquidity Index

6月2日

DECODE Global Liquidity Index 🌊

The DECODE Global Liquidity Index is a powerful tool designed to track and aggregate global liquidity by combining data from the world's 13 largest economies. It offers a comprehensive view of financial liquidity, providing crucial insights into the underlying currents that can influence asset prices and market trends.

The economies covered are: United States, China, European Union, Japan, India, United Kingdom, Brazil, Canada, Russia, South Korea, Australia, Mexico, and Indonesia. The European Union accounts for major individual economies within the EU like Germany, France, Italy, Spain, Netherlands, Poland, etc.

Key Features:
1. Customizable Liquidity Sources

• Include Global M2: You can opt to include the M2 money supply from the 13 listed economies. M2 is a broad measure of money supply that includes cash, checking deposits, savings deposits, money market securities, mutual funds, and other time deposits. (Note: Australia uses M3 as its primary measure, which is included when M2 is selected for Australia).
  
• Include Central Bank Balance Sheets (CBBS): Alternatively, or in addition, you can include the total assets held by the central banks of these economies. Central bank balance sheets expand or contract based on monetary policy operations like quantitative easing (QE) or tightening (QT).
  
• Combined View: If you select both M2 and CBBS, and data is available for both, the indicator will display an average of the two aggregated values. If only one source type is selected, or if data for one type is unavailable despite both being selected, the indicator will display the single available and selected component. This provides flexibility in how you define and analyze global liquidity.
  

2. Lead/Lag Analysis (Forward Projection):

• Lead Offset (Days): This feature allows you to project the liquidity index forward by a specified number of days.
  
• Why it's useful: Global liquidity changes can often be a leading indicator for various asset classes, particularly those sensitive to risk appetite, like Bitcoin or growth stocks. These assets might lag shifts in liquidity. By applying a lead (e.g., 90 days), you can shift the liquidity data forward on your chart to more easily visualize potential correlations and identify if current asset price movements might be responding to past changes in liquidity.
  

3. Rate of Change (RoC) Oscillator:

Year-over-Year % View: Instead of viewing aggregate liquidity, you can switch to a Year-over-Year (YoY%) Rate of Change (ROC) oscillator.

Why it's useful:

• Momentum Identification: The ROC highlights the speed and direction of liquidity changes. Positive values indicate liquidity is increasing compared to a year ago, while negative values show it's decreasing.
  
• Turning Points: Oscillators make it easier to spot potential accelerations, decelerations, or reversals in liquidity trends. A cross above the zero line can signal strengthening liquidity momentum, while a cross below can signal weakening momentum.
  
• Cycle Analysis: It helps in assessing the cyclical nature of liquidity provision and its potential impact on market cycles.
  

This indicator aims to provide a clear, customizable, and insightful measure of global liquidity to aid traders and investors in their market analysis.

6月2日

版本注释

Bug fix

6月18日

版本注释

Added US Treasury General Account and Reverse Repurchase Agreements. These are subtractions from the overall liquidity calculation.