European Shares Set For Cautious Start

European stocks look set to open higher on Monday even as a cautious undertone may prevail amid U.S. yield spike.

Asian markets gave up early gains to turn mixed as benchmark Treasury yields held near a one-year high and China data painted a patchy economic picture.

China’s industrial output and retail sales surged in the first two months of the year, official data showed today, while weaker-than-expected investment growth and rise in unemployment disappointed markets.

China’s relentless crackdown on technology companies and tightening financial conditions also sapped investor confidence.

On the Covid-19 front, more countries have suspended the use of AstraZeneca Plc’s vaccine after some concerns around side effects.

Half of the 20 regions in Italy are entering another lockdown today after a surge in coronavirus infections.

The overall number of global Covid-19 cases has topped 119.8 million, while the deaths have surged to more than 2.65 million, according to Johns Hopkins University.

The dollar held firm ahead of this week’s FOMC meeting, with traders looking for the U.S. central bank to address the recent spike in bond yields.

Treasury Secretary Janet Yellen said last week that U.S. inflation risks remain subdued despite the Biden administration stimulus. Gold gained ground on inflation worries while Brent crude prices hovered near $70 a barrel.

Traders also keep an eye on U.S. reports on retail sales, industrial production, housing starts, and regional manufacturing activity this week for clues on the economic outlook.

The Bank of England rate decision is due on Thursday and no change in policy is expected.

The Bank of Japan monetary policy decision is slated for Friday, with economists expecting a review of the central bank’s monetary policy strategy.

U.S. stocks ended mixed on Friday as rising yields after the passage of a $ 1.9 trillion stimulus bill and positive economic data reinforced expectations the economy was headed to a high-growth recovery.

The Dow climbed 0.9 percent to extend its winning streak for the sixth day and close at a fresh record high. The S&P 500 inched up 0.1 percent to a new record closing high while the tech-heavy Nasdaq Composite index gave up 0.6 percent.

European markets also ended mixed on Friday as Treasury yields resumed their climb and Beijing expanded a crackdown on technology companies. The pan-European Stoxx 600 fell 0.3 percent after a four-session winning streak.

The German DAX dropped half a percent, while France’s CAC 40 index edged up 0.2 percent and the U.K.’s FTSE 100 rose 0.4 percent.

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