OPEN-SOURCE SCRIPT
M2 Global Liquidity Index
The M2 Global Liquidity Index calculates a composite index reflecting the aggregate liquidity provided by the M2 money supply of five major currencies: Chinese Yuan (CNY), US Dollar (USD), Euro (EUR), Japanese Yen (JPY), and British Pound (GBP). The M2 money supply includes cash, checking deposits, and easily convertible near money. By incorporating exchange rates (CNY/USD, EUR/USD, JPY/USD, GBP/USD), the script adjusts each country's M2 supply to a common base (USD) and sums them up to produce a global liquidity metric. This metric, plotted on a daily timeframe, provides an overview of the total liquidity available in these five significant economies.
Understanding the M2 money supply is crucial for assessing liquidity because it represents the amount of money readily available in an economy for spending and investment. Higher M2 levels generally indicate more liquidity, suggesting easier access to capital for businesses and consumers, potentially leading to economic growth. Conversely, lower M2 levels can signify tighter liquidity conditions, possibly resulting in constrained spending and investment.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
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Disclaimer
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Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Automate your TradingView strategies through TradersPost.io to your favorite broker or exchange. Equities, futures, options, and crypto supported!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.