European Shares Likely To Drift Lower At Open

(RTTNews) - European stocks may drift lower at open on Thursday as hopes for early rate cuts faded and Middle East tensions spiked.

Asian markets traded mixed, with Chinese stocks leading regional losses on concerns about economic recovery.

The dollar held near a one-month high and yields on the benchmark U.S. 10-year Treasury notes traded near five-week highs, while gold hovered near five-week lows as traders scaled back bets on a March rate cut by the Federal Reserve.

The yuan steadied after sinking to its lowest level in nearly two months. The Japanese yen held at a 1-1/2 month low ahead of key consumer price inflation data due on Friday.

Oil edged up slightly as OPEC forecast relatively strong growth in global oil demand over the next two years and a cold blast in the U.S. disrupted some oil production.

Meanwhile, Pakistan has carried out a series of "highly coordinated" military strikes in the Siestan-o-Baluchistan province of Iran, the Ministry of Foreign Affairs said in a statement.

Trading later in the day may be impacted by reaction to U.S. reports on jobless claims, housing starts and Philadelphia-area manufacturing activity.

Closer home, the European Central Bank publishes the account of the monetary policy meeting held on December 13 and 14 later in the day.

U.S. stocks fell overnight to extend losses from the previous session as strong December retail sales data along with an unexpected uptick in industrial production in the month added to anxiety about the outlook for interest rates.

Resilient consumer spending helped propel the economy in recent weeks, offsetting weakness in other sectors like manufacturing, the Federal Reserve said in its Beige Book survey.

The Dow slipped 0.3 percent to reach its lowest closing level in almost a month while the S&P 500 and the tech-heavy Nasdaq Composite both shed around 0.6 percent.

European stocks closed notably lower on Wednesday after several ECB officials warned that markets are getting ahead on rate cut expectations.

The pan-European STOXX 600 fell 1.1 percent. The German DAX gave up 0.8 percent, France's CAC 40 declined 1.1 percent and the U.K.'s FTSE 100 lost 1.5 percent.