US Treasuries rose last week, pushing down 10-year note yields. Australian government debts rose over the week. European government notes posted the biggest weekly advance in four months as a result of surging oil prices and renewed concern over the credit market. In the UK, government bonds advanced over the week, pushing the yields of two-year notes down by the most since March.

The US dollar (USD) weakened broadly last week due to a combination of fading expectations of an imminent rate hike, record-high oil prices, battered US stocks and lower bond yields. Sterling (GBP) rose on the back of the broad USD weakness despite a downward revision of the UK Q1 growth and the Bank of England’s indication that rates would not be rising soon.

US stocks ended the week lower, due to the rebound in oil prices, the Federal Reserve warning of the risk of rising inflation, and analysts’ downgrading of financial stocks. In Europe, pharmaceutical stocks were firm. Japanese financial shares declined on concerns that bad loans might increase.