GLOBAL M2 LIQUIDITY & CREDIT — WEEKLY MEMO
Week Ending 2026-09-25
A mechanical give-back week for US plumbing: the TGA fell -$44.4B to $947.3B, right on Treasury's ~$950B end-September target, net liquidity rose an estimated +$48.6B and reserves recovered +$48.4B to $2,969.9B. The money tier firmed at the margin -- US M2 accelerated to $23.34T (+5.7% YoY) in the August H.6 -- while the ECB balance sheet shrank -EUR12.8B on -EUR12.5B of policy-portfolio runoff. H.8 bank credit rose +$9.5B with C&I loans down -$2.4B. Risk assets rallied (BTC +4.0%, Nasdaq +2.1%, S&P 500 +1.2%) even as gold slipped -2.0%.
GMLCI Score
+18.50
Mild global liquidity support
Global M2 Momentum
+50
Broad money trend
USD-Adjusted M2
+20
FX-adjusted research proxy
Central Bank Liquidity
+0
Fed / ECB / BOJ / PBOC / BOE
Credit Impulse
+0
Quantity, breadth, pricing
Funding / Dollar
-30
HY OAS 2.80%
Risk Transmission
+25
BTC 4.0% wk
Gold (USD/oz)
$4,261
-2.0% weekly
Executive Conclusion
Supportive
- US M2 5.7% YoY (2026-08); Euro area M3 3.4% YoY (2026-07).
- China M2 CNY 356.81T, 7.5% YoY (2026-08).
- US HY spreads at 2.80% with a 12bp weekly move.
Restrictive
- No new China release this week -- August data (published mid-September) carried forward: M2 356.81T CNY (+7.5% YoY, down from 7.7% in July), and cumulative aggregate financing over the first eight months ran 2.64T CNY below the same period last year, so the credit impulse stays negative. September money and credit data are due around Oct 15.
- Broad USD index moved 0.0% over the weekly window.
- BTC changed 4.0% and gold -2.0% over the week.
Main Warning
- The long end is doing the tightening: the 10-year rose +17bp to a cycle-high 5.18% one week after the Fed's first hike, the 30-year reached 5.47%, HY spreads widened +12bp to 2.80%, and SOFR crept from 3.85% to 3.88% toward the 3.90% IORB floor even as reserves rose. The broad-dollar input is stale at September 18 (H.10 lag), so the dollar leg understates pressure if the dollar firmed with yields.
POSITIVE GMLCI +18.50 — 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% | +0 | +0.00 |
| Credit Impulse | 15% | +0 | +0.00 |
| Funding / Dollar Stress | 10% | -30 | -3.00 |
| Risk Transmission | 10% | +25 | +2.50 |
| Metric | Value |
|---|---|
| Weekly GMLCI | +18.50 |
| 4-week moving average | +18.75 |
| 13-week moving average | +20.83 |
GMLCI history (release-aware)
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-09-25 | +18.50 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-09-18 | +18.50 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-09-11 | +19.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-09-04 | +19.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-08-28 | +19.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
Show 62 earlier entries
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-08-21 | +24.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-08-14 | +19.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-08-07 | +27.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-31 | +18.25 | +50 | +20 | +5 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-24 | +21.25 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 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 |
| 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) = -0.50 ranks in the 35th 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 | $23.34T | 5.7% YoY | 2026-08 | POSITIVE |
| Euro area M3 | — | 3.4% YoY | 2026-07 | POSITIVE |
| China M2 | CNY 356.81T | 7.5% YoY | 2026-08 | POSITIVE |
| Japan M2 | JPY 1296.4T | 2.0% YoY | 2026-08 | POSITIVE |
| UK M4ex | — | 4.3% YoY / -£10.1B flow MoM | 2026-07 | NEUTRAL |
Market transmission (weekly)
| Series | Latest | Weekly Change | As Of | Read |
|---|---|---|---|---|
| Broad USD index | 119.51 | 0.0% | 2026-09-18 | NEUTRAL |
| US HY OAS | 2.80% | 12bp | 2026-09-24 | NEUTRAL |
| S&P 500 | 7,743.41 | 1.2% | 2026-09-25 | POSITIVE |
| Nasdaq Composite | 27,068.72 | 2.1% | 2026-09-25 | POSITIVE |
| Bitcoin | $84,048 | 4.0% | 2026-09-25 | POSITIVE |
| Gold (USD/oz) | $4,261.05 | -2.0% | 2026-09-25 | 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) | NEUTRAL | See the US memo for reserves, TGA, RRP, and net-liquidity plumbing. |
| ECB | EUR 5,898.5B / -12.8B wk | NEGATIVE | Policy-purpose securities changed -12.5B (statement 2026-09-18). |
| BOJ | M2 2.0% YoY | POSITIVE | Money-stock reference month: 2026-08. |
| PBOC | M2 7.5% YoY | NEUTRAL | No new China release this week -- August data (published mid-September) carried forward: M2 356.81T CNY (+7.5% YoY, down from 7.7% in July), and cumulative aggregate financing over the first eight months ran 2.64T CNY below the same period last year, so the credit impulse stays negative. September money and credit data are due around Oct 15. |
| BOE | M4ex 4.3% YoY | NEUTRAL | Reference month: 2026-07. |
Global Credit Map
| Credit Layer | Latest | Read | Notes |
|---|---|---|---|
| US bank credit (H.8) | $19,876.3B / +9.5B wk | POSITIVE | Released 2026-09-25; observation covers 2026-09-16. |
| C&I loans | $2,965.3B / -2.4B | NEUTRAL | Business-credit channel. |
| Real-estate loans | $5,836.7B / +4.4B | POSITIVE | Credit-breadth channel. |
| Consumer loans | $1,926.0B / +1.6B | POSITIVE | Household channel. |
| China TSF / RMB loans | Release-aware read | NEUTRAL | No new China release this week -- August data (published mid-September) carried forward: M2 356.81T CNY (+7.5% YoY, down from 7.7% in July), and cumulative aggregate financing over the first eight months ran 2.64T CNY below the same period last year, so the credit impulse stays negative. September money and credit data are due around Oct 15. |
| 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% (12bp) | 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 September 30 quarter-end with ~$202B of 2/5/7-year and 10-year TIPS settlements (model projects net liquidity -$26.9B), whether SOFR stays below the 3.90% IORB floor, the BOE August M4ex release (Sep 29), the ECB August M3 release, and the September payrolls report (Oct 2).
- 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 (USD/oz) | Public XAU/USD spot snapshots; LBMA Gold Price PM from 2026-09-11 | 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.