Central banks drive the world's financial system and are the largest providers of liquidity so it is important to track whether they are providing or withdrawing liquidity from markets. Direct correlations between asset prices and central bank liquidity levels can be drawn.
IMPORTANT NOTES: - Use this script on timeframes > 1D for greatest accuracy. - Also included in the net effect of the reverse repo operations and treasury general account in the US. - Ensure to turn labels on so that you can understand which line is what central bank! - The black line shows the average, smoothed assets for the largest central banks... closest I could achieve to the net effect given scaling limitations of pinescript.
no if inflation(liquidity goes up) the markets go up as funds sell the currency into risk on asset class) correct me if needed just a perpetual student like anyone else.