Roundup of overnight activity and today's economic highlights.

Last Updated:

15th May 2008

US Treasuries Rise on Weaker Economic Data

Overnight Developments

US Treasuries ended the day higher on Thursday as weak economic data reminded investors that the threat of higher official interest rates is still some way off. Investors had been edging close to pricing in rate rises in recent sessions following hawkish comments on inflation from Fed members and a series of better than expected economic data. However, the latest manufacturing figures, weekly jobs and industrial production data all came in on the weak side of expectations and were a clear reminder that the economic is still in a fragile state. The result was some relief buying of bonds whose yields have risen sharply in recent times. The upside impetus remained through the session and kept prices firmly in positive territory through to the close.

Today's Key Events

The US housing data are expected to display continued weakness, underlining the fact that this key area of the economy shows no signs of bottoming out. A series of downbeat numbers on housing and consumer confidence would help to calm fears that the Fed's policy stance is about to alter in response to escalating concerns about future inflation prospects.

Forthcoming - Key Events

Policy meetings - ECB 8 May, MPC 7/8 May, FOMC 24/25 June, Quarterly Inflation Report 14 May 2008.