European Shares Set For A Weak Start

stockmarkets aug16 11nov21 lt

European stocks may open on a cautious note Thursday as investors began to price in more aggressive Fed tightening.

After a worrisome report on U.S. inflation that slammed into the bond market, traders in the fed funds futures market now see the first Federal Reserve interest rate hike to be much more likely in July.

Asian markets traded mixed, the dollar was up and the 10-year Treasury yield edged up to 1.55 percent from 1.43 percent late Wednesday amid speculation that the Fed will accelerate tapering and advance rate hikes.

Gold held steady near a five-month high, while bitcoin leapt to a new record high of $69,000 before retreating.

Oil edged up slightly after falling sharply overnight as the Energy Information Administration reported an inventory build of 1 million barrels.

In economic releases, the Office for National Statistics will release U.K. GDP, industrial and construction output, and foreign trade figures for September later in the day.

The European Central Bank's economic bulletin and the European Commission economic forecasts will also be out in the European session.

U.S. stocks fell overnight and bond yields rose after jobless claims dropped to a new pandemic low and a consumer inflation report showed the largest annual increase in prices in three decades, raising speculation the Fed may lift rates sooner than expected.

The tech-heavy Nasdaq Composite index lost 1.7 percent, the S&P 500 dropped 0.8 percent and the Dow shed 0.7 percent.

European stocks closed slightly higher on Wednesday after spending much of the day's session in negative territory on fears about liquidity woes spreading in China's property sector.

The pan European Stoxx 600 gained 0.2 percent. The German DAX edged up 0.2 percent, France's CAC 40 index finished marginally higher and the U.K.'s FTSE 100 added 0.9 percent.

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