GLOBAL M2 LIQUIDITY & CREDIT — WEEKLY MEMO
Week Ending 2026-10-02
Quarter-end drained US plumbing: the TGA rose +$36.7B to $984.0B on ~$202B of coupon settlements and the RRP jumped +$41.2B on window dressing, pulling bank reserves down -$88.2B to $2,881.7B and net liquidity an estimated -$82.6B. Abroad, broad money firmed -- euro area M3 3.5% in August (from 3.4%) and UK M4ex 4.4% (from 4.3%) -- while the ECB balance sheet was nearly flat (-EUR1.2B). GMLCI eases to 16.00 from 18.50 as Risk Transmission falls to 0 on a flat equity/BTC week.
GMLCI Score
+16.00
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 3.24%
Risk Transmission
+0
BTC 0.5% wk
Gold (USD/oz)
$4,163
-3.8% weekly
Executive Conclusion
Supportive
- US M2 5.7% YoY (2026-08); Euro area M3 3.5% YoY (2026-08).
- China M2 CNY 356.81T, 7.5% YoY (2026-08).
- US HY spreads at 3.24% with a 31bp 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); cumulative aggregate financing over the first eight months was 23.91T CNY, 2.64T CNY less than a year earlier, so the credit impulse stays negative. September money and credit data are due around October 15.
- Broad USD index moved 0.0% over the weekly window.
- BTC changed 0.5% and gold -3.8% over the week.
Main Warning
- Credit is starting to price the tightening: high-yield spreads widened +31bp to 3.24% in a week, the 30-year reached 5.61%, H.8 bank credit fell -$25.1B, and September payrolls rose only +29,000 with unemployment up to 4.2%. SOFR sat on the 3.90% IORB floor for most of quarter-end with reserves now ~$118B below $3T. The broad-dollar series has not updated past September 25, so the dollar leg of Funding/Dollar Stress is stale.
POSITIVE GMLCI +16.00 — 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% | +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% | +0 | +0.00 |
| Metric | Value |
|---|---|
| Weekly GMLCI | +16.00 |
| 4-week moving average | +18.00 |
| 13-week moving average | +20.12 |
GMLCI history (release-aware)
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-10-02 | +16.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 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 |
Show 63 earlier entries
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-08-28 | +19.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 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) = -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 | $23.34T | 5.7% YoY | 2026-08 | POSITIVE |
| Euro area M3 | — | 3.5% YoY | 2026-08 | 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 | — | 4.4% YoY / +£16.2B flow MoM | 2026-08 | NEUTRAL |
Market transmission (weekly)
| Series | Latest | Weekly Change | As Of | Read |
|---|---|---|---|---|
| Broad USD index | 120.33 | 0.0% | 2026-09-25 | NEUTRAL |
| US HY OAS | 3.24% | 31bp | 2026-10-01 | NEUTRAL |
| S&P 500 | 7,722.72 | -0.3% | 2026-10-02 | NEGATIVE |
| Nasdaq Composite | 27,190.86 | 0.5% | 2026-10-02 | POSITIVE |
| Bitcoin | $84,479 | 0.5% | 2026-10-02 | POSITIVE |
| Gold (USD/oz) | $4,163.40 | -3.8% | 2026-09-29 | 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 5,897.3B / -1.2B wk | NEGATIVE | Policy-purpose securities changed -3.0B (statement 2026-09-25). |
| 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); cumulative aggregate financing over the first eight months was 23.91T CNY, 2.64T CNY less than a year earlier, so the credit impulse stays negative. September money and credit data are due around October 15. |
| BOE | M4ex 4.4% YoY | NEUTRAL | Reference month: 2026-08. |
Global Credit Map
| Credit Layer | Latest | Read | Notes |
|---|---|---|---|
| US bank credit (H.8) | $19,862.5B / -25.1B wk | NEGATIVE | Released 2026-10-02; observation covers 2026-09-23. |
| C&I loans | $2,952.9B / -2.3B | NEUTRAL | Business-credit channel. |
| Real-estate loans | $5,840.8B / +4.1B | POSITIVE | Credit-breadth channel. |
| Consumer loans | $1,928.9B / +0.7B | 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); cumulative aggregate financing over the first eight months was 23.91T CNY, 2.64T CNY less than a year earlier, so the credit impulse stays negative. September money and credit data are due around October 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 3.24% (31bp) | 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 the RRP unwind after quarter-end (model projects a roughly flat US net-liquidity week, +$0.4B), the October 6-8 3/10/30-year refunding auctions (settling October 15 with the tax date), the ECB weekly statement on October 6, Japan September M2 (~October 9) and China September money/credit (~October 15), and September CPI on October 14.
- 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.