European Shares Seen Opening Little Changed As Rate Cut Hopes Fade

European stocks may open on a flat note Tuesday as traders return to their desks after a long holiday weekend.

The U.S. dollar hovered near a 4-1/2-month high against major peers, benefiting from an overnight jump in Treasury yields as traders pushed back their expectations on when the Federal Reserve will begin cutting interest rates.

Gold edged up slightly and traded above $2,250 per ounce, while oil prices were up around half a percent after an alleged Israeli attack on Iranian consulate in Syria.

Asian markets traded mixed, with Hong Kong’s Hang Seng index rallying over 2 percent while benchmark indexes in Australia and New Zealand were little changed with a negative bias as bonds in the region fell.

Trading later in the day may be impacted by reaction to U.S. reports on factory orders and job openings as well as remarks by several Fed officials.

The highly anticipated U.S. jobs report due on Friday could influence the Fed’s decision on when to cut interest rates.

U.S. stocks gave up early gains to end mixed overnight while bond yields spiked as strong manufacturing data along with signs of rising component prices in the ISM report raised concerns about stubborn inflation and poured cold water on hopes for interest rate cuts in June.

Investors also reacted to Friday’s release of PCE inflation data and Fed Chair Jerome Powell’s comments that the U.S. central bank is in no rush to begin cutting interest rates.

The Dow shed 0.6 percent and the S&P 500 eased 0.2 percent while the tech-heavy Nasdaq Composite edged up 0.1 percent.

Major European markets were closed on Monday for the Easter holiday.