Overview

• High-frequency data continue to suggest an ongoing recovery in global activity.

• Global inflation has abated, reflecting subdued energy prices and low core inflation in major economies.

• Following a rebound in 16Q4 and 17Q1, global trade momentum continued in 17Q2.

• Capital inflows to EMDEs slowed in July, partly reflecting a rise in global bond yields.

• Oil prices are fluctuating around $45/bbl, with global oil stocks close to record highs.

Chart of the Month

• Unconventional monetary policies by the U.S. Federal Reserve, and, later, by the European Central Bank (ECB), led to a significant expansion of their balance sheets.

• In June, the Federal Reserve announced that it would start reducing the size of its balance sheet this year, while the ECB signaled in July that the ongoing recovery might warrant a further unwinding of asset purchases over time.

• Prospects of diminished monetary policy support contributed to an uptick in Euro Area and U.S. long-term yields in July.