GLOBAL M2 LIQUIDITY & CREDIT — WEEKLY MEMO
Week Ending 2026-05-22
Mild support, but the cushion narrowed sharply as China credit weakened and the USD firmed.
GMLCI Score
+11.00
Mild global liquidity support
Global M2 Momentum
+50
Broad money trend
USD-Adjusted M2
+10
FX-adjusted research proxy
Central Bank Liquidity
-20
Fed / ECB / BOJ / PBOC / BOE
Credit Impulse
-20
Quantity, breadth, pricing
Funding / Dollar
+0
HY OAS 2.80%
Risk Transmission
+0
BTC -2.4% wk
Gold (XAU/USD)
$4,545
-3.06% weekly
Executive Conclusion
Supportive
- US M2 4.6% YoY (2026-03); Euro area M3 3.2% YoY (2026-03).
- China M2 CNY 353.04T, 8.6% YoY (2026-04).
- US HY spreads at 2.80% with a -2bp weekly move.
Restrictive
- April China new yuan loans contracted by CNY 10B; monthly TSF flow fell to CNY 620B and January-April AFRE was CNY 893B below the prior year.
- Broad USD index moved 0.6% over the weekly window.
- BTC changed -2.4% and gold -3.06% over the week.
Main Warning
- China credit transmission weakened even though China M2 accelerated to 8.6% YoY.
POSITIVE GMLCI +11.00 — Mild global liquidity support.
GMLCI — Global M2 Liquidity & Credit Index
GMLCI = 0.30 x Global M2 Momentum + 0.20 x USD-Adjusted M2 + 0.15 x Central Bank Liquidity + 0.15 x Credit Impulse + 0.10 x Funding/Dollar Stress + 0.10 x Risk Transmission
| Component | Weight | Score | Contribution |
|---|---|---|---|
| Global M2 Momentum | 30% | +50 | +15.00 |
| USD-Adjusted M2 | 20% | +10 | +2.00 |
| Central Bank Liquidity | 15% | -20 | -3.00 |
| Credit Impulse | 15% | -20 | -3.00 |
| Funding / Dollar Stress | 10% | +0 | +0.00 |
| Risk Transmission | 10% | +0 | +0.00 |
| Metric | Value |
|---|---|
| Weekly GMLCI | +11.00 |
| 4-week moving average | N/A — insufficient history |
| 13-week moving average | N/A — insufficient history |
GMLCI history (release-aware)
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-05-15 | +23.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-22 | +11.00 | +50 | +10 | -20 | MILD GLOBAL LIQUIDITY SUPPORT |
Each weekly score uses only releases public by that week ending; history is not rewritten when later data arrives. The gauge ranks only the FRED-derived 20% market tier — Funding/Dollar Stress plus Risk Transmission — versus frozen 2020+ history. The four judgment components are outside this lens; the full GMLCI is not percentile-ranked.
Market-Stress Alert
| Alert | Status | Notes |
|---|---|---|
| Market-Stress percentile (20% tier) | NEUTRAL | Market-Stress (20% tier) = +0.00 ranks in the 52nd percentile of weeks since 2020 (N=155). This ranks only Funding/Dollar Stress and Risk Transmission; the full GMLCI is not percentile-ranked. |
Global Liquidity Dashboard
Broad money (release-aware)
| Bloc | Level | Growth | Reference Month | Read |
|---|---|---|---|---|
| US M2 | $22.69T | 4.6% YoY | 2026-03 | POSITIVE |
| Euro area M3 | — | 3.2% YoY | 2026-03 | POSITIVE |
| China M2 | CNY 353.04T | 8.6% YoY | 2026-04 | POSITIVE |
| Japan M2 | JPY 1295.4T | 2.3% YoY | 2026-04 | POSITIVE |
| UK M4ex | — | 4.5% YoY / 0.7% MoM | 2026-03 | NEUTRAL |
Market transmission (weekly)
| Series | Latest | Weekly Change | As Of | Read |
|---|---|---|---|---|
| Broad USD index | 119.16 | 0.6% | 2026-05-20 | NEGATIVE |
| US HY OAS | 2.80% | -2bp | 2026-05-20 | POSITIVE |
| S&P 500 | 7,432.97 | -0.2% | 2026-05-20 | NEGATIVE |
| Nasdaq Composite | 26,270.36 | -0.5% | 2026-05-20 | NEGATIVE |
| Bitcoin | $77,495 | -2.4% | 2026-05-20 | NEGATIVE |
| Gold (XAU/USD) | $4,545.16 | -3.06% | 2026-05-20 | NEGATIVE |
Monthly releases are carried forward until a new official release is public. Market series use the latest observation available by the report week. Funding/Dollar Stress and Risk Transmission scores are FRED-derived from the market inputs shown above. Gold is a tracked confirmation layer, not an independently scored GMLCI component.
Central Bank Liquidity
| Central Bank | Latest Input | Read | Notes |
|---|---|---|---|
| Federal Reserve | US URLI memo (companion report) | NEGATIVE | See the US memo for reserves, TGA, RRP, and net-liquidity plumbing. |
| ECB | EUR 6,179.2B / -6.1B wk | NEGATIVE | Policy-purpose securities changed -9.4B (statement 2026-05-15). |
| BOJ | M2 2.3% YoY | POSITIVE | Money-stock reference month: 2026-04. |
| PBOC | M2 8.6% YoY | NEGATIVE | April China new yuan loans contracted by CNY 10B; monthly TSF flow fell to CNY 620B and January-April AFRE was CNY 893B below the prior year. |
| BOE | M4ex 4.5% YoY | NEUTRAL | Reference month: 2026-03. |
Global Credit Map
| Credit Layer | Latest | Read | Notes |
|---|---|---|---|
| US bank credit (H.8) | $19,498.7B / +37.4B wk | POSITIVE | Released 2026-05-15; observation covers 2026-05-06. |
| C&I loans | $2,877.3B / +0.0B | NEUTRAL | Business-credit channel. |
| Real-estate loans | $5,782.4B / +7.6B | POSITIVE | Credit-breadth channel. |
| Consumer loans | $1,900.0B / -1.5B | NEUTRAL | Household channel. |
| China TSF / RMB loans | Release-aware read | NEGATIVE | April China new yuan loans contracted by CNY 10B; monthly TSF flow fell to CNY 620B and January-April AFRE was CNY 893B below the prior year. |
| BIS cross-border / FX credit | Quarterly context layer | NEUTRAL | BIS total credit and Global Liquidity Indicators; not a weekly datapoint. |
| Credit pricing | HY OAS 2.80% (-2bp) | POSITIVE | Market-pricing confirmation layer. |
NEUTRAL Credit is scored as a layered transmission check, not a single headline datapoint.
Next Week Watchlist
Scheduled / probable focus
- Watch the May 26 US M2 release and whether US bank-credit growth can offset China credit softness.
- Monitor broad USD, HY spreads, and gold for confirmation or invalidation.
- Compare the companion URLI memo: global money can stay supportive while US plumbing drains risk liquidity.
Bull / Base / Bear Scenarios
| Scenario | Setup | Market Impact | Confirms / Invalidates |
|---|---|---|---|
| BULL | USD-adjusted M2 strengthens; China credit broadens; HY spreads stay tight. | Supports equities, EM, BTC, high beta. | Confirms: GMLCI > +40. Invalidates: USD spike or spread widening. |
| BASE | Broad money grows but credit transmission stays mixed. | Selective risk support. | Confirms: GMLCI +10 to +39. Invalidates: China credit weakens further. |
| BEAR | USD-adjusted M2 contracts; credit and funding stress worsen. | Risk-off, high-beta pressure. | Confirms: GMLCI < -40. Invalidates: USD weakens and credit broadens. |
Sources & Data Definitions
| Field | Source | Type |
|---|---|---|
| US M2 | Federal Reserve H.6 / FRED M2SL | Official |
| Euro M3 / loans | ECB monetary developments | Official |
| ECB balance sheet | ECB weekly financial statement | Official |
| China M2 / TSF | PBOC releases | Official |
| Japan M2 | BOJ money stock | Official |
| UK M4ex | BOE money and credit | Official |
| US bank credit | Federal Reserve H.8 | Official |
| USD / HY / equities / BTC | FRED DTWEXBGS, BAMLH0A0HYM2, SP500, NASDAQCOM, CBBTCUSD | Market |
| Gold spot | Public XAU/USD spot snapshots | Market (secondary) |
| Cross-border credit | BIS Global Liquidity Indicators | Official (quarterly) |
Funding/Dollar Stress and Risk Transmission are FRED-derived at week creation. Global M2 Momentum, USD-Adjusted M2, Central Bank Liquidity, and Credit Impulse remain documented research/judgment components until complete keyless feeds are available.