European stock indices opened lower as a fresh surge in bond yields and Brent crude's push back above $100 a barrel weighed on risk sentiment. The DAX led declines among major benchmarks, while the Eurostoxx, CAC 40, FTSE 100, IBEX and FTSE MIB all slipped in early trading.
European stocks opened lower across the board, with Germany's DAX leading regional declines, down 0.6% as a fresh surge in bond yields curbed risk appetite. The pan-regional Eurostoxx and France's CAC 40 each fell 0.4%. Spain's IBEX and Italy's FTSE MIB each dropped 0.5%. The UK's FTSE 100 slipped 0.3%.
Bond yields hit multi-year high
The main drag on sentiment is the bond market. The 10-year Treasury yield pushed back above 5%, hitting 5.11% — its highest level since 2007. That is adding to concerns that financial conditions could tighten further if the bond selloff continues, after the pressure already weighed on Wall Street in the prior session and is now spilling into Europe.
Oil back above $100 revives inflation worries
Oil prices are the other factor keeping investors cautious. Brent crude's renewed push above $100 has brought the inflation question back into focus, particularly as recent euro area data has also pointed to firmer price pressures. That leaves European stocks facing the same uncomfortable combination of higher oil prices and higher bond yields that has weighed on broader markets in recent weeks.
For now, the declines at the open remain relatively contained. But if yields break further into more uncomfortable territory, that will stay the key pressure point to watch as the session develops.
Source: investingLive
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