European equities cautious as Treasury yields rebound to 5% and crude oil climbs

Market snapshot:

Key moves:

• 10-year Treasury yields rose 5 basis points, reaching 5.00%.
• The US dollar and Canadian dollar led, while the Swiss franc lagged during the session.
• WTI crude oil advanced 1.6% to $101.07.
• Gold inched up 0.1% to $4,029.
• European stocks declined; S&P 500 futures fell 0.2%.

After the hectic risk-off wave in trading the day before, the European session was much calmer as markets took a breather.

But the bidd on Treasuries appears to be easing for now, with the 10-year yield bouncing back to the 5% level. This has lent some support to the dollar, pushing EUR/USD back toward 1.1200 and USD/JPY closer to 157.00 during the day.

This is occurring even as oil prices push higher again. Brent crude briefly touched $115 earlier, while WTI crude is up over 1% to around $111, as worries about the Middle East conflict and geopolitical tensions persist. This continues to stoke inflation concerns, leaving investors on edge about the effect on borrowing costs and the trajectory of major central banks.

In Europe, PMI data released on the day painted a mixed picture. The momentum of growth has slowed, largely due to France, while price pressures remain in place as the final quarter unfolds. Although this might not alter the ECB's equation next week, it leaves December uncertain for now.

Regional equities remain weighed down by France's fiscal concerns, keeping the risk sentiment gloomy as the sell-off from yesterday continues. US futures reflect the same, with S&P 500 futures down 0.2% and Nasdaq futures down 0.1%.

In other markets, gold is at least staging a slight recovery after briefly dipping below $4,000 for the first time in three months earlier today. Nonetheless, the precious metal is still on course for a weekly drop of over 3%, despite Treasury yields declining during the week as well.