European Shares To Open On Sluggish Note Amid Fed, China Concerns

(RTTNews) - European stocks are seen opening on a sluggish note Monday as inflation and interest rate concerns returned to haunt investors.

Gold held near five-week lows, the dollar climbed to a five-week high and Treasury yields remained elevated, as hotter-than-expected producer inflation data from the U.S. stoked concerns that U.S. interest rates will likely remain at over 20-year highs until at least early-2024.

Most Asian currencies sank on risk aversion while oil prices fell over 1 percent on China demand concerns amid reports of a looming default for Country Garden, one of the country's biggest property developers.

Chinese yuan held near a five-week low after recent weak bank loan, inflation and exports data.

One of China's largest private wealth managers has missed payments on multiple high yield products in the latest sign of turmoil in China's financial sector.

Asian stocks tumbled on China woes and ahead of a busy week of economic data, with Japanese inflation, China's industrial output numbers and U.S. reports on retail sales, industrial production and housing starts due this week.

The minutes of the latest Federal Reserve meeting will also attract investor attention this week.

U.S. stocks ended narrowly mixed on Friday and Treasury yields rose after data showed producer prices rose more than expected in July while consumer confidence dropped for the first time in 14 months, raising much uncertainty about the outlook for inflation and interest rates.

The producer price index rose 0.3 percent from the previous month following a revised unchanged reading in June and expectations for a reading of 0.2 percent. The annual rate of producer price growth reaccelerated to 0.8 percent from just 0.2 percent in June, as cost of services increased.

The tech-heavy Nasdaq Composite gave up 0.6 percent to reach its lowest closing level in well over a month and the S&P inched down 0.1 percent while the Dow rose 0.3 percent.

European stocks fell sharply on Friday, as China growth concerns and anxiety about the outlook for U.S. interest rates overshadowed better-than-expected U.K. growth data.

The pan European STOXX 600 fell 1.1 percent. The German DAX lost 1 percent, France's CAC 40 shed 1.3 percent and the U.K.'s FTSE 100 declined 1.2 percent.