Liquidity in cross border capital flows fell for the second consecutive month, according to the latest CrossBorder Capital Global Liquidity Cycle index figures.
CrossBorder Capital, which publishes a monthly Global Liquidity Index, says liquidity has increased yet again, although recent adjustments to index constituents for a greater EM weighting has shaved off some points.
Data from CrossBorder Capital’s June 2013 Global Liquidity Index points to continued weak flows into emerging markets of just $5bn, compared to estimates that central banks contributed $161bn and domestic institutions $100bn.
Putting aside developments in and around Cyprus, the real challenge to the eurozone is how to reconcile still significantly different levels of competitiveness, argues CrossBorder Capital.
Mike Howell, managing director of CrossBorder Capital, says the data on eurozone liquidity points to a further 20% weakening in the single currency.
CrossBorder Capital, the UK based independent advisory and alternative fund manager, has said its headline Global Liquidity Index (GLI) points to a general improvement through February, but that other data suggest some key challenges to financial markets in coming months.