Flash: Central banks take aim at private demand – Goldman Sachs

FXstreet.com (Barcelona) - For much of the year, expanding central bank balance sheets and a growing commitment to engineer inflation have depressed sovereign bond markets and helped to push equities higher.

The policy goal is to stimulate private demand, particularly as fiscal policy in the US, Europe, the UK, China and elsewhere continues to be a headwind. According to the Economics Research Team at Goldman Sachs, “We examine the elements that influence investment spending and find that easier financial conditions, still-wide profit margins, expectations of improving demand and evidence of tight manufacturing capacity all seem to favor the upbeat outlook for US investment spending.” EMs and China share some of these characteristics. Europe and Japan fare worst in these comparisons.