GLOBAL M2 LIQUIDITY & CREDIT — WEEKLY MEMO
Week Ending 2026-07-17
US plumbing flipped to draining as the July 15 tax date and ~$119B of coupon settlements rebuilt the TGA +$46.7B, pulling net liquidity down ~$45B and bank reserves down $36.9B to $3.10T; risk assets pulled back (S&P -1.6%, Nasdaq -2.9%, BTC -0.2%) though HY credit stayed tight (+1bp to 2.71%). Global money growth held up (euro-area M3 +3.2% YoY, US M2 +5.6%) while the ECB balance sheet fell a further -EUR12.5B.
GMLCI Score
+18.25
Mild global liquidity support
Global M2 Momentum
+50
Broad money trend
USD-Adjusted M2
+20
FX-adjusted research proxy
Central Bank Liquidity
+10
Fed / ECB / BOJ / PBOC / BOE
Credit Impulse
+5
Quantity, breadth, pricing
Funding / Dollar
+0
HY OAS 2.71%
Risk Transmission
-30
BTC -0.2% wk
Gold (XAU/USD)
$4,017
-2.5% weekly
Executive Conclusion
Supportive
- US M2 5.6% YoY (2026-05); Euro area M3 3.2% YoY (2026-05).
- China M2 CNY 356.71T, 8.0% YoY (2026-06).
- US HY spreads at 2.71% with a 1bp weekly move.
Restrictive
- China's June release confirmed a softer credit impulse: M2 +8.0% YoY (down from 8.6% in May); M1 +4.0% (from 5.5%); TSF stock 462.06T CNY (+7.4% YoY); H1 social financing 20.84T CNY ran 2.02T below last year with new RMB loans of 10.72T.
- Broad USD index moved 0.0% over the weekly window.
- BTC changed -0.2% and gold -2.5% over the week.
Main Warning
- Treasury's bill-led TGA rebuild toward the ~$1T late-July target is now underway (Treasury Outlook cut to -50) and runs into the July 28-29 FOMC, where roughly half the Committee pencils a hike; China's June M2/M1 and H1 credit flows softened.
POSITIVE GMLCI +18.25 — 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% | +20 | +4.00 |
| Central Bank Liquidity | 15% | +10 | +1.50 |
| Credit Impulse | 15% | +5 | +0.75 |
| Funding / Dollar Stress | 10% | +0 | +0.00 |
| Risk Transmission | 10% | -30 | -3.00 |
| Metric | Value |
|---|---|
| Weekly GMLCI | +18.25 |
| 4-week moving average | +19.81 |
| 13-week moving average | +14.67 · 3 of 13 reconstructed (4-week MA is fully live) |
GMLCI history (release-aware)
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-07-17 | +18.25 | +50 | +20 | +5 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-10 | +23.75 | +50 | +20 | +5 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-03 | +25.25 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-06-26 | +12.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-06-19 | +22.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
Show 52 earlier entries
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-06-12 | +8.50 | +50 | +10 | -20 | NEUTRAL / MIXED |
| 2026-06-05 | +14.50 | +50 | +40 | -10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-29 | +22.50 | +60 | +30 | -10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-22 | +11.00 | +50 | +10 | -20 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-15 | +23.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-08 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-05-01 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-24 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-17 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-10 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-03 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-27 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-20 | -7.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-13 | -6.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-06 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-27 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-20 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-13 | -0.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-06 | -14.00 | +0 | +0 | +0 | MILD GLOBAL LIQUIDITY DRAG |
| 2026-01-30 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-23 | -0.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-16 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-09 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-02 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-26 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-19 | -7.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-12 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-05 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-28 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-21 | -10.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-14 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-07 | -10.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-31 | +5.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-24 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-17 | -10.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-10 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-03 | +2.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-26 | -6.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-19 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-12 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-05 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-29 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-22 | -6.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-15 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-08 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-01 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-25 | +5.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-18 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-11 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-04 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-06-27 | +5.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-06-20 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
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) | NEGATIVE | Market-Stress (20% tier) = -3.00 ranks in the 32nd 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 | $23.05T | 5.6% YoY | 2026-05 | POSITIVE |
| Euro area M3 | — | 3.2% YoY | 2026-05 | POSITIVE |
| China M2 | CNY 356.71T | 8.0% YoY | 2026-06 | POSITIVE |
| Japan M2 | JPY 1298.1T | 2.5% YoY | 2026-05 | POSITIVE |
| UK M4ex | — | TBD YoY / £11.0B flow MoM | 2026-05 | NEUTRAL |
Market transmission (weekly)
| Series | Latest | Weekly Change | As Of | Read |
|---|---|---|---|---|
| Broad USD index | 120.50 | 0.0% | 2026-07-10 | NEUTRAL |
| US HY OAS | 2.71% | 1bp | 2026-07-16 | NEUTRAL |
| S&P 500 | 7,457.69 | -1.6% | 2026-07-17 | NEGATIVE |
| Nasdaq Composite | 25,520.24 | -2.9% | 2026-07-17 | NEGATIVE |
| Bitcoin | $63,900 | -0.2% | 2026-07-17 | NEGATIVE |
| Gold (XAU/USD) | $4,016.95 | -2.5% | 2026-07-17 | 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) | POSITIVE | See the US memo for reserves, TGA, RRP, and net-liquidity plumbing. |
| ECB | EUR 5,970.5B / -12.5B wk | NEGATIVE | Policy-purpose securities changed -12.2B (statement 2026-07-10). |
| BOJ | M2 2.5% YoY | POSITIVE | Money-stock reference month: 2026-05. |
| PBOC | M2 8.0% YoY | NEGATIVE | China's June release confirmed a softer credit impulse: M2 +8.0% YoY (down from 8.6% in May); M1 +4.0% (from 5.5%); TSF stock 462.06T CNY (+7.4% YoY); H1 social financing 20.84T CNY ran 2.02T below last year with new RMB loans of 10.72T. |
| BOE | M4ex TBD YoY | NEUTRAL | Reference month: 2026-05. |
Global Credit Map
| Credit Layer | Latest | Read | Notes |
|---|---|---|---|
| US bank credit (H.8) | $19,644.7B / +29.6B wk | POSITIVE | Released 2026-07-17; observation covers 2026-07-08. |
| C&I loans | $2,872.2B / -5.9B | NEUTRAL | Business-credit channel. |
| Real-estate loans | $5,802.8B / -0.5B | NEUTRAL | Credit-breadth channel. |
| Consumer loans | $1,907.4B / +7.3B | POSITIVE | Household channel. |
| China TSF / RMB loans | Release-aware read | NEGATIVE | China's June release confirmed a softer credit impulse: M2 +8.0% YoY (down from 8.6% in May); M1 +4.0% (from 5.5%); TSF stock 462.06T CNY (+7.4% YoY); H1 social financing 20.84T CNY ran 2.02T below last year with new RMB loans of 10.72T. |
| BIS cross-border / FX credit | Quarterly context layer | NEUTRAL | BIS total credit and Global Liquidity Indicators; not a weekly datapoint. |
| Credit pricing | HY OAS 2.71% (1bp) | NEUTRAL | 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 next week's 2Y/5Y/7Y note auctions (settle July 31), the July 22 19-year bond and July 23 10-year TIPS, whether the ~$186B calendar-model net-liquidity rebound materializes, and the July 28-29 FOMC.
- 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.