An index of global tropical cyclone activity (GTCA) is extracted from an interbasin dispersion matrix composed of correlations in the frequency of tropical cyclones among the five principal basins of activity over the period 1966--1998. The extraction is performed using a single-factor common factor analysis model. Factor scores provide the index of GTCA. The time series of factor scores is matched with annual series' of the El Ni¿o-southern oscillation (ENSO) and the North Atlantic oscillation (NAO) revealing a statistical link to the NAO, but not to the ENSO. Results suggest a greater role of high latitude atmospheric and oceanic processes in modulating tropical cyclone climate than previously considered. ¿ 2000 American Geophysical Union