European Shares Seen Lower After US Yield Spike

European stocks are seen drifting lower at open on Friday as bond yields continue to rise, hurting riskier assets.

Emerging-market currencies such as the South African rand and Mexican peso sold off and the dollar gained ground on risk-off sentiment after U.S. treasury yields vaulted to their highest since the pandemic began overnight.

Asian markets slumped amid worries that accelerating inflation could trigger a pullback in monetary policy support.

Gold headed for a second straight weekly and monthly decline while oil is heading for a fourth monthly gain ahead of the OPEC+ meeting next week, with traders watching for any changes to production strategy. Bitcoin remains on track for the worst weekly slide in almost a year.

G20 finance ministers and central bankers will gather for a video conference led by Italy later today and the global response to the unprecedented havoc wreaked by the coronavirus on the economy will top the agenda.

Another batch of U.S. economic data on personal income and spending, consumer sentiment, and Chicago-area business activity may impact trading later in the session.

U.S. stocks tumbled overnight as U.S. Treasury yields hit a new 52-week high after the release of a batch of largely upbeat data on GDP, jobless claims and new orders for manufactured durable goods.

The tech-heavy Nasdaq Composite slumped as much as 3.5 percent to reach its lowest closing level in nearly a month, while the Dow Jones Industrial Average lost 1.8 percent and the S&P 500 shed 2.5 percent.

European stocks ended on a subdued note Thursday as rising bond yields outweighed positive news on the vaccine front and dovish signals from the Federal Reserve.

The pan European Stoxx 600 gave up 0.4 percent. The German DAX shed 0.7 percent, France’s CAC 40 index eased 0.2 percent and the U.K.’s FTSE 100 slipped 0.1 percent.