No companies are expected to top expectations. Best Buy Co., Inc. (

Key News• Oil prices fell below $53 to almost a two-year low . (AP)• The yield on two-year US Treasury bonds hit a record low of 1.06 per cent, responding both to the fresh flight to safety and the prospect of lower interest rates. Eurozone government bond futures hit their highest level since March 2006. (FT)

• World stock markets tumbled Thursday, with benchmarks in Tokyo and Seoul losing almost 7 percent each. (AP)• Five years after Federal Reserve Chairman Ben S. Bernanke helped stamp out the risk of deflation, the threat is returning as the financial crisis and a worsening economic slump pull inflation lower. (Bloomberg)• The RBA said in a monthly bulletin today that it bought A$3.15 billion ($2 billion) of its own currency last month, the biggest net purchase on record, as the local dollar posted a record monthly decline. • U.S. options

In the currency market, the dollar moved higher against the euro. Late Thursday, the euro was trading at $1.3463 vs. $1.349 on Wednesday. “We expect euro/dollar to test a fresh one and a half-year low under $1.3200 and onto $1.3170 before month end,” predicted Ashraf Laidi, of CMC Markets US.

The buck held up despite some truly horrendous data rolling in.

Output from the nation’s factories, mines and utilities dropped 2.8% in September, the Fed reported. That marks the biggest decline since December 1974, and was nearly twice as bad as economists’ projections for a fall of only 1.5%.

Separately, the Philadelphia Fed’s index of manufacturing also plunged to minus 35.7 in October from reading of plus 3.8 in September. Economists surveyed by MarketWatch expected the index to dip to negative 5. It was the worst-ever drop in the Phillie gauge.

The one bright spot was that the consumer price index was

A lot of economic data hit the tape today, and it all tells the same story: It's ugly out there. While initial jobless claims dipped to 461,000 from 477,000 a week earlier, continuing claims rose to 3.711 million from 3.671 million, the most since June 2003. Net inflows into U.S. assets also came in at just $14 billion in August, well below forecasts for a reading of $30 billion. Meanwhile, industrial production tanked 2.8% in September, much worse than the 0.8% decline that was expected and the single-worst reading in ANY month going back to 1974. And the Philadelphia Fed index plunged to -37.5 from 3.8 a month earlier. That was well below the -10 reading that was forecast and the worst reading since October 1990.

The Electric Light Orchestra lyrics “… you took me ohh, higher and higher baby, it’s a living thing, it’s a terrible thing …” have been mulling through my head over the past week as central bankers’ inflation-fighting rhetoric moved to centre stage.

A succession of hawkish comments from US policymakers persuaded pundits that the US rate-cutting cycle was over, resulting in a stronger US dollar, plummeting government bonds, predominantly lower global stock markets (with Asia seeing the most red), and non-agricultural commodities coming off the boil.

Ben Bernanke, Chairman of the Federal Reserve, said on Monday that the danger of a “substantial downturn” in the US economy had abated during the past month but that inflation risks were growing.

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