The broadest measure of money supply in use by Euro-zone nations. It includes all currency in circulation, bank deposits, repurchase agreements, debt securities up to 2 years, and the value of money market shares. A larger money supply reduces the purchasing power of the Euro and puts downward pressure on the exchange rate. However, because an increase in M3 leads to price inflation, this figure can also be indicative of the likelihood of future interest rate hikes. The Euro-zone M3 is reported in headlines as a percent change from the previous month or as a Three Month Average, which smoothest monthly volatility in the money supply.
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