European Shares Set For Subdued Open

European stocks are seen drifting lower on Friday as investors monitor bond yields, the slow pace of vaccinations and a new wave of coronavirus infections and fresh lockdowns across Europe.

The yield on the benchmark 10-year Treasury bonds hit 1.71 percent, its highest in almost 14 months, amid bets that inflation would eventually force the Federal Reserve to tighten monetary policy.

Earlier today, the Bank of Japan agreed to allow benchmark yields to fluctuate in a slightly wider trading band, as widely expected.

A raft of European countries said they would soon resume vaccinations after the European medical regulator said the jab is “safe and effective” and its benefits outweigh possible risks.

Some countries in Europe are imposing Covid-19 related restrictions once again as new infections increase. As the outbreak spirals out of control, Brazil is reporting record daily numbers.

Asian markets followed Wall Street lower while oil prices steadied but were still down more than 8 percent for the week. Gold edged lower, feeling the pressure from a stronger dollar and climbing U.S. Treasury yields.

U.S. stocks fell overnight as oil prices recorded their biggest one-day drop since September and bond yields surged on expectations for faster economic recovery and inflation.

Economic reports proved to be a mixed bag. While U.S. jobless claims unexpectedly jumped to a one-month high due to the impact of Winter Storm Uri, a measure of regional manufacturing activity spiked to a nearly 50-year high.

The Dow dropped half a percent and the S&P 500 shed 1.5 percent while the tech-heavy Nasdaq Composite index plunged as much as 3 percent amid a sell-off in technology stocks.

European stocks rose on Thursday after both the Federal Reserve and the Bank of England vowed to keep liquidity plentiful despite concerns around inflation.

The pan European Stoxx 600 gained 0.4 percent. The German DAX rallied 1.2 percent, France’s CAC 40 index inched up 0.1 percent and the U.K.’s FTSE 100 gained 0.3 percent.