European overnight deposits slightly decreased but remain at a high level, indicating ample market liquidity

(1) The latest daily liquidity data released by the European Central Bank shows that financial institutions used the overnight deposit facility for 1,917.307 billion euros, a decrease from the previous day's 1,973.738 billion euros, but still at an extremely high level. (2) Meanwhile, usage of the overnight loan facility edged up from 114 million euros to 140 million euros, a very limited scale, indicating that overall liquidity conditions in the banking system remain loose. (3) Holdings in the current account increased noticeably from 351.686 billion euros to 406.131 billion euros, further confirming that abundant liquidity in the interbank market within the Eurozone remains unchanged. (4) The overnight deposit facility continues to approach the 2 trillion euro mark, reflecting that financial institutions prefer to park excess liquidity at the central bank with low returns, rather than deploying it substantially into the real economy or risk assets, with risk aversion still dominant.