Markets often peak at high valuations, but high valuations are rarely the trigger. Equities can trade on elevated multiples for long periods. The break usually comes when liquidity can no longer sustain positioning, leverage and collateral demand. That is why our framework starts with Global Liquidity, cross-checked against Treasury and funding markets, while treating the business cycle as a lagging consequence rather than the primary driver.
Latest monthly data for end-June 2026 show our Global Liquidity Index (GLI™), which ranges from 0 to 100, stabilising around the 40.0 level. This is roughly in line with the April print and slightly below the May reading of 45.6. Conditions in the Advanced Economies were slightly firmer last month, at 42.9, but the liquidity profile is broadly consistent worldwide. The main weakness came from Central Banks, where the index fell to 45.8 from 54.7, overtaking the drag from weaker private-sector cash flows. The Bank of Japan, at 26.1, and the US Fed, at 46.6, recorded the most pronounced falls.
