European Shares Set To Drift Lower On Inflation Concerns

European stocks are set to open lower on Thursday as resurgent worries about rising U.S. bond yields fueled a bout of risk aversion.

Asian markets fell sharply as investors tempered some of their optimism over growth and shifted focus back to lofty valuations and inflation.

The spectre of higher U.S. bond yields undermined low-yielding, safe-haven assets, such as the yen, the Swiss franc and gold, while both Brent and WTI futures held above the $60 mark on prospect of OPEC+ maintaining supply cuts.

Unemployment and retail sales figures from euro area and construction Purchasing Managers’ survey results from Germany are due later in the session, headlining a light day for the European economic news.

Across the Atlantic, a report on weekly jobless claims may attract attention, although trading activity is likely to be somewhat subdued ahead of the release of the monthly jobs report on Friday.

Investors also look to comments from Federal Reserve Chair Jerome Powell later in the day for any clues to a possible change in Fed language ahead of the March 16-17 policy meeting.

U.S. stocks ended lower overnight as the bond market sell-off gained pace amid positive news on the vaccine front, with President Biden announcing the U.S. will have enough vaccine supply for every adult in America by the end of May.

The tech-heavy Nasdaq Composite tumbled as much as 2.7 percent to its lowest closing level in nearly two months, while the S&P 500 lost 1.3 percent and the Dow Jones Industrial Average eased 0.4 percent after the release of weak private sector employment and service sector activity data.

European stocks advanced on Wednesday as investors reacted to the U.K.’s budget announcement, earnings news and updates on coronavirus vaccination drive.

The pan European Stoxx 600 ended flat with a positive bias. The German DAX edged up 0.3 percent, France’s CAC 40 index rose 0.4 percent and the U.K.’s FTSE 100 gained 0.9 percent.