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Oct 2, 2014
Divergence between US activity and policy news and other parts of the world - Goldman Sachs
FXStreet (Łódź) - Goldman Sachs team of analysts suggests that in recent months the difference between the progress of the US recovery as well as the Fed's monetary policy path and those of other countries, especially the Eurozone, has been widening.
Key quotes
"As we start the last quarter of 2014, clearer trends have emerged in the macro landscape: over the past few months, the consistent strength in the USD has played out forcefully, and several major equity markets have shown more consistent progress."
"These shifts reflect two related macrodynamics: a clear acceleration in the US growth picture after the softness earlier in the year, and the divergence between activity and policy news in the US and other parts of the world, particularly the Euro area."
"The first of these dynamics has already ended. With the US economy unlikely to accelerate much further, it has become more obvious that the global picture has been running mostly on one engine."
"And today’s final Global Leading Indicator for September shows that the world economy has slipped back into (mild) Slowdown. Divergence across the regions, in that sense, is limiting the capacity for sustained global acceleration."
"The key question is whether this divergence can continue and whether it is already reflected in asset markets."
"Although some forces may act against divergence, we think the bigger picture is still one in which the US recovery and monetary policy path continues to stand out relative to the picture in most other major economies."
Key quotes
"As we start the last quarter of 2014, clearer trends have emerged in the macro landscape: over the past few months, the consistent strength in the USD has played out forcefully, and several major equity markets have shown more consistent progress."
"These shifts reflect two related macrodynamics: a clear acceleration in the US growth picture after the softness earlier in the year, and the divergence between activity and policy news in the US and other parts of the world, particularly the Euro area."
"The first of these dynamics has already ended. With the US economy unlikely to accelerate much further, it has become more obvious that the global picture has been running mostly on one engine."
"And today’s final Global Leading Indicator for September shows that the world economy has slipped back into (mild) Slowdown. Divergence across the regions, in that sense, is limiting the capacity for sustained global acceleration."
"The key question is whether this divergence can continue and whether it is already reflected in asset markets."
"Although some forces may act against divergence, we think the bigger picture is still one in which the US recovery and monetary policy path continues to stand out relative to the picture in most other major economies."