Will equity markets demand substantial central bank monetary expansion?

''Global stocks are on course to record a seventh consecutive day of declines as the latest batch of central bank monetary policy manoeuvres fail to counteract worries about fading economic activity.

The FTSE All-World equity index is down 1 per cent as the FTSE Eurofirst 300 endures a loss of 0.8 per cent and after the Asia-Pacific region shed 1.7 per cent.  Wall Street's S&P 500 is slipping 0.7 per cent at the opening bell.

Risk aversion is the dominant theme, particularly with regard to commodities and growth-sensitive currencies.  Copper is down 1.5 per cent to $3.39 a pound and the Australian dollar is off 1.3 per cent to $1.0116.

Conversely, money is moving into fixed income bolt-holes as the 10-year US bond yield contracts by 2 basis points to 1.49 per cent, 5bp above a record low, and German Bund yields are down 4bp to 1.25 per cent.  Berlin, London and Washington this week have all secured record low yields on 10-year auctions.

The dollar index is up 0.3 per cent to a fresh two-year high, pressuring gold, which is down $19 to $1,557 an ounce.''