Global liquidity fell in the week to October 9 on Michael Howell’s early estimate, its first weekly fall since July. The Shadow Monetary Base underneath it, the central-bank money and collateral the system borrows against, fell faster, to its lowest since March 2025. The collateral multiplier, the lending the system stacks on each dollar of that base, set another record and still could not hold global liquidity up.
It is an early signal, unconfirmed, but the trend is clear. Our test for a liquidity rollover has triggered: both of the base’s growth rates negative four reports in a row, and global liquidity itself falling. The base has shrunk since February, and this week it shrank faster than the record lever could stretch.
Stocks haven’t felt it. The S&P 500 closed October 12 just 0.15% under its October 6 record. Liquidity reaches risk assets with about a three months lag, which brings this week’s turn to prices early January 2027.
Bond volatility keeps the pressure on credit in the meantime. The MOVE index (the Merrill Lynch Option Volatility Estimate), the price traders pay to protect against swings in U.S. Treasuries, closed a third straight week above its 200-week average on October 11, so our risk-off trigger stands. Inflation expectations and long-term borrowing costs are climbing together, which leaves the Federal Reserve (Fed) no room to ease.
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Our team splits on whether the turn in the world’s money reaches stocks in Q4, and Hayloo has money on who’s right. Behind the paywall we lay out both sides of the trade, and the one reading that settles it. Then the rest of the tape: Wall Street’s bond desks turning bullish while one of our own says the long end hasn’t topped; the day Washington’s restraint on Iran runs out, now that missiles have hit Riyadh’s airport; why a slower economy won’t take the war out of oil; and what cracked the AI trade in Seoul.
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