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Bank of Japan Governor Signals Accommodative Stance Amid Negative Real Rates 
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Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
Bank of Korea Nominee Shin Hyun-song Signals Possible Rate Hike Amid Middle East Inflation Fears 
According to the monthly economic bulletin released by the European Central Bank, incoming data for the second quarter point to subdued global activity and trade. Also, risks to outlook for global activity and EMs in particular remain on the downside.
The report further mentioned that the Eurozone markets have weathered post-Brexit uncertainty and volatility with encouraging resilience and the EZ economic recovery is expected to proceed at moderate pace; if warranted the ECB governor council will act by using all available instruments.
Moreover, global indicators for the second quarter of 2016 point to subdued economic activity and trade. The global composite output Purchasing Managers’ Index (PMI) recorded a further decline in the second quarter, falling to 51.3, the lowest value seen since end-2012.
In addition, the economic recovery in the euro area is continuing, driven largely by developments in private consumption but also by investment. Also, private consumption, which is the main driver of the ongoing recovery, continues to contribute positively to growth.
Beyond the short term, recovering demand, accommodative monetary policy as well as improving financing conditions should boost investment, albeit with some downside risks. Euro area total exports (goods and services) remained subdued in the first quarter of 2016 and monthly trade data point so far to weak momentum in the growth of goods exports in the second quarter, the report stated.
Meanwhile, Eurozone companies have been issuing more bonds in the wake of a March decision by the European Central Bank to buy up private-sector debt, the Frankfurt institution said on Wednesday. By buying up bonds, the ECB hopes to make it easier for companies to raise money, allowing them to invest and hire workers, which in turn should boost growth and inflation, the economic bulletin added.
Looking ahead, the economic recovery of the zone is expected to improve at a moderate pace although uncertainty has increased following the outcome of the UK referendum. Furthermore, The July 2016 euro area bank lending survey suggests that the recovery in loan growth is driven by increasing demand as well as by improvements in loan supply.
