Morgan Stanley sees China’s free liquidity stable for fourth month

Published 27/10/2025, 10:52
© Reuters.

Investing.com - Morgan Stanley reports that China’s free liquidity remained stable and positive in September, marking the fourth consecutive month of positive readings since June.

The financial services firm noted that September’s stability in free liquidity was accompanied by stronger M1 money supply growth, softening industrial production growth, and slower producer price index deflation in China.

Morgan Stanley expects the positive free liquidity conditions to continue through the fourth quarter of 2023, though it forecasts some moderation as the year concludes.

The anticipated moderation toward year-end is attributed to waning government bond quota in the fourth quarter, according to the firm’s analysis.

The investment bank tracks these metrics through its proprietary MS China Free Liquidity Indicator, which it compares against the year-over-year percentage changes in the MSCI China index to gauge market conditions.

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