European Shares Set To Drift Lower As Rate Cut Hopes Fade

(RTTNews) - European stocks may open on a tepid note Thursday amid signs that global interest rates are likely to stay higher for longer.

Asian markets were broadly lower due to inflation and interest-rate concerns.

Gold slipped for a second straight session and the dollar traded higher as U.S. Treasury yields remained elevated, in part due to a weak debt auction the previous day.

Oil extended overnight losses as investors fretted about the likely adverse impact the high borrowing costs will have on growth and energy demand.

In the Middle East, an Israeli official cautioned that the war in Gaza might persist until the year's end to achieve the aim of destroying the Palestinian group.

On the data front, Eurozone unemployment and economic sentiment figures may garner investor attention later in the day.

Across the Atlantic, reports on weekly jobless claims, first quarter GDP and pending home sales may attract some attention ahead of the closely watched inflation data due on Friday.

Q1 GDP will see its first revision, with expectations for growth to be lower than initially reported.

The Federal Reserve's preferred inflation measure will be released on Friday and price increases as measured by the personal consumption expenditures index are expected to be on par with March figures.

Overnight, U.S. stocks ended lower as bond yields spiked for a second day on uncertainty about the Federal Reserve's interest-rate path.

The yield on the benchmark ten-year note hit its highest level in nearly a month after a $44 billion auction of seven-year Treasury notes was met with tepid demand.

The Dow fell 1.1 percent to reach its lowest closing level in almost a month while the S&P 500 gave up 0.7 percent and the tech-heavy Nasdaq Composite declined 0.6 percent.

European stocks fell for a second straight session on Wednesday after data revealed German inflation rose slightly more than forecast to 2.8 percent in May.

The pan European STOXX 600 dipped 1.1 percent. The German DAX lost 1.1 percent, France's CAC 40 tumbled 1.5 percent and the U.K.'s FTSE 100 shed 0.9 percent.