European Shares Poised For Cautious Start On Fed Rate Worries

European stocks are seen opening broadly lower on Monday amid lingering worries about how high the Federal Reserve might raise rates to get inflation down to its 2 percent target.

The dollar gained along with a rise in U.S. Treasury yields, as investors looked ahead to the release of U.S. inflation, retail sales and industrial production data due this week for additional clues on the rate outlook.

Gold remained under selling pressure and oil prices fell over 1 percent in Asian trading amid the dollar’s strength.

Asian markets were broadly lower, though Chinese stocks eked out modest gains on bets for a reopening-led recovery this year.

Data over the weekend showed that Chinese new bank loans jumped more than expected to record highs in January after the country ditched most anti-COVID restrictions in early December.

Sino-U.S. tensions remained in focus after the U.S. air force shot down a flying object near the Canadian border, the fourth object downed this month, and reports suggested that the Biden administration is preparing new rules that would restrict Beijing’s access to advanced technologies.

The yen slipped on reports that Japan’s government was likely to appoint academic Kazuo Ueda as the next Bank of Japan governor.

U.S. stocks ended mixed on Friday, as higher long-dated bond yields on data showing improved consumer sentiment and a rebound in near-term inflation expectations weighed on technology stocks.

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

European stocks closed lower on Friday as investors assessed the outlook for economic growth, inflation and interest rates.

The pan European STOXX 600 fell 1 percent as the Bank of England warned that Britain would likely enter a shallow but lengthy recession.

The German DAX lost 1.4 percent, France’s CAC 40 index gave up 0.8 percent and the U.K.’s FTSE 100 slipped 0.4 percent.

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