Global Monetary & Financial Sector News
Global inflation rose from 2.9% in June to 3.0% in July, according to a FocusEconomics estimate which excludes Venezuela. Inflation for 2019 as a whole is expected to be below 2018’s level, due largely to softer economic momentum and lower average oil prices.
Key emerging markets such as Indonesia, Mexico and South Africa recently cut rates to support growth amid a tougher external backdrop. This came as the Fed loosened its stance in July. Looking ahead, global interest rates should fall as the Fed is seen cutting rates further, providing room for emerging markets to loosen their stances in turn.
The CAD, EUR and GBP lost ground against the USD over the last month as the Fed struck a more hawkish-than-expected tone at its July meeting. In contrast, the CHF and JPY gained strength, likely on greater safe-haven demand amid swirling trade tensions.