ZentralbankLiquiditaet**Central Bank Liquidity YoY**
This indicator tracks the year-over-year change in combined U.S. Federal Reserve and European Central Bank liquidity.
It combines:
• Federal Reserve total assets
• European Central Bank total assets
• EUR/USD exchange rate for converting ECB assets into U.S. dollars
The resulting data provides a simplified view of how aggregate U.S. and European central bank liquidity is expanding or contracting compared with the same period one year earlier.
### How to Read the Indicator
**Positive values** indicate that combined central bank liquidity is higher than one year ago.
**Negative values** indicate that combined central bank liquidity is lower than one year ago.
The color gradient provides an immediate visual representation of liquidity conditions:
• Green = liquidity expansion
• White = neutral conditions
• Magenta = liquidity contraction
The indicator uses weekly data and can optionally apply EMA smoothing to reduce short-term noise while preserving the broader liquidity trend.
### Why Central Bank Liquidity Matters
Changes in central bank balance sheets can influence financial conditions and overall market liquidity. Expanding liquidity can create a more supportive environment for risk assets, while contracting liquidity may create tighter financial conditions.
This indicator is designed to help identify broader liquidity regimes and should be used alongside price action, macroeconomic data, monetary policy developments, and other market indicators.
### Important
This indicator does not generate buy or sell signals and should not be interpreted as a standalone trading system.
Central bank liquidity is only one component of global financial liquidity, and changes in asset prices can be influenced by many additional factors.
For educational and informational purposes only. Not financial advice.
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