European Shares Seen Opening Little Changed In Lackluster Trade

(RTTNews) - European stocks are seen opening largely unchanged on Monday, after having suffered heavy losses in the previous session on worries over further rate rises from the Federal Reserve to combat inflation in the world's largest economy.

As rate worries mount, investors await U.S. reports on durable goods orders, consumer confidence and manufacturing and service sector activity this week for further direction.

Fed futures currently imply at least three more hikes from the current 4.50 percent to 4.75 percent band. The European Central Bank and the Bank of England are also expected to raise interest rates further to ensure price stability.

U.S. Treasury Secretary Janet Yellen told Reuters on Saturday that new U.S. data showing an unexpected jump in inflation in January signals that the fight against inflation "is not a straight line" and more work is needed.

Asian markets traded mostly lower this morning, with benchmark indexes in Australia, New Zealand and South Korea falling around 1 percent.

The dollar held near a two-month high, and the two-year U.S. Treasury yield was up slightly, while oil prices dipped as investors braced for Chinese manufacturing surveys this week for a clear direction on oil demand.

U.S. stocks fell sharply on Friday and logged their biggest weekly losses in more than two months, as higher January inflation and strong consumer spending figures raised fresh concerns about the outlook for interest rates. Traders largely shrugged off improved housing and consumer sentiment data.

The Dow gave up 1 percent to reach a two-month closing low and the S&P 500 dropped 1.1 percent to its lowest closing level in over a month while the tech-heavy Nasdaq Composite gave up 1.7 percent.

European stocks closed Friday's session firmly in the red as signs of stubbornly high inflation in the world's largest economy stoked fears the Fed will have to raise interest rates further and for an extended period.

The pan-European STOXX 600 fell 1 percent. The German DAX lost 1.7 percent and France's CAC 40 index tumbled 1.8 percent while the U.K.'s FTSE 100 eased 0.4 percent.