Weighted Global Liquidity Index (WGLI)

26 Jun

The Weighted Global Liquidity Index (WGLI) provides a comprehensive view of major central bank balance sheets from around the world, using data converted to USD for consistency and expressed in trillions. This indicator includes specific US accounts like the Treasury General Account (TGA) and Reverse Repurchase Agreements (RRP), which are subtracted from the Federal Reserve's balance sheet to offer a more detailed perspective on US liquidity.

The WGLI incorporates not only the balance sheets but also additional key financial indicators such as Foreign Exchange Reserves, Interbank Rates, and Interest Rates, weighted by their global liquidity importance. The regions and central banks included are:

• Federal Reserve System (FED) - Treasury General Account (TGA) - Reverse Repurchase Agreements (RRP)
  
• European Central Bank (ECB)
  
• People's Bank of China (PBC)
  
• Bank of Japan (BOJ)
  
• Bank of England (BOE)
  
• Bank of Canada (BOC)
  
• Reserve Bank of Australia (RBA)
  
• Reserve Bank of India (RBI)
  
• Swiss National Bank (SNB)
  
• Central Bank of the Russian Federation (CBR)
  
• Central Bank of Brazil (BCB)
  
• Bank of Korea (BOK)
  
• Reserve Bank of New Zealand (RBNZ)
  
• Sweden's Central Bank (Riksbank)
  
• Central Bank of Malaysia (BNM)
  

This tool is designed for anyone interested in gaining a snapshot of global liquidity to interpret macroeconomic trends. By examining these balance sheets and additional indicators, users can understand policy trajectories and evaluate the global economic climate. It also offers insights into asset pricing and helps investors make informed capital allocation decisions.

Feel free to explore and customize the WGLI script on Trading View to suit your analysis needs!