European stocks slide at open as bond yields surge

Bond yields rallying again weigh on risk appetite, sending European equities lower at the start of trading. The opening moves:

• Eurostoxx -0.4%
• Germany DAX -0.6%
• France CAC 40 -0.4%
• UK FTSE -0.3%
• Spain IBEX -0.5%
• Italy FTSE MIB -0.5%

The declines are widespread, with the DAX posting the biggest drop as European markets mirror a cautious global tone.

The bond market remains the main drag. 10-year Treasury yields have climbed back above 5%, reaching 5.11%—the highest since 2007. That stokes fears that further bond selling could tighten financial conditions. Wall Street already felt the pressure in yesterday's trading, and that weakness spills into Europe at the open.

Oil prices are another factor keeping many investors on edge. Brent crude's return above $100 refocuses attention on inflation, especially as recent euro area data also points to firmer price pressures.

This leaves European stocks confronting the same challenging combination that has weighed on markets in recent weeks: higher oil prices and higher bond yields.

For now, the early declines are relatively modest. However, if bond yields push further into more uncomfortable territory, that will remain the key pressure point to watch as the session develops.