European Shares Set For Soft Start As Bond Yields Spike

(RTTNews) - European stocks are seen opening broadly lower on Friday as U.S. Treasury yields continue to witness upward pressure on anxiety about how fast the Federal Reserve could cut interest rates.

According to analysts, sticky February U.S. consumer and producer price inflation figures would be enough to knock the U.S. central bank off course for rate cuts in June.

Asian markets traded lower, with Hong Kong's Hang Seng index falling more than 2 percent as the People's Bank of China held a key rate steady and drained cash from the banking system on a net basis, signaling a cautious approach of using its monetary policy to boost growth.

Also, data showed China's home prices dropped 1.4 percent year-on-year in February, marking the steepest drop in 13 months amid regulatory crackdowns.

The Japanese yen recovered some lost ground as investors kept a close eye on critical wage negotiations in the country and eyed next week's BOJ policy meeting.

Gold was marginally higher while oil dipped after seeing a significant uptick of 2 percent on Thursday to reach a four-month high on revised IEA forecasts suggesting a tighter market.

The Bank of England's inflation survey results and U.S. reports on import and exports prices, industrial production and consumer sentiment may garner investor attention later in the day.

U.S. stocks declined overnight as hotter-than-expected producer inflation print sent Treasury yields higher and cast doubt on a June rate cut.

The producer price inflation rose 0.6 percent in February from last month, outpacing the modest 0.3 percent gain forecasted by economists.

Retail sales numbers for February came in short of estimates while unemployment claims dipped unexpectedly during the preceding week, separate reports revealed.

The Dow dipped 0.4 percent, while the S&P 500 and the tech-heavy Nasdaq Composite both gave up around 0.3 percent.

European stocks closed broadly lower on Thursday amid increased anxiety about the outlook for interest rates.

The pan European STOXX 600 eased 0.2 percent. The German DAX slipped 0.1 percent and the U.K.'s FTSE 100 shed 0.4 percent while France's CAC 40 added 0.3 percent.