More overseas rate hikes in store?

The British pound is flying this morning, and attempting to break out to a new high against the U.S. dollar. The catalyst: A Confederation of British Industry survey showed U.K. factories jacked up the prices they charge at the fastest pace in 12 years. The news comes just days after the Bank of England surprised the markets with a quarter-point rate increase ... and it's leading to speculation even more BOE hikes are in store.

If you're a U.S. resident, and you're traveling to London, your dollars aren't going to go too far. Each pound now buys almost TWO dollars -- or in other words, a 10-pound meal will cost you $20, up from around $18 a year ago.

One other thing to consider: In today's global marketplace, hot inflation news -- even overseas -- can pressure domestic bond prices. So it's no surprise U.S. long bonds were recently down about 7/32 and 10-year rates were up about 2 basis points.