Europe open: Stocks dip with government bond yields again in focus on both sides of the Pond

Stocks on the Continent were slipping lower in early trading following the small losses seen overnight on Wall Street after the release of consumer price data showing that inflation rose at its fastest clip since late 1981 in June.

Worth noting, on the back of those numbers, Fed funds futures moved to price-in 75% odds of a 100 basis point interest rate hike from the Fed at its next meeting on 26-27 July.

Michael Hewson, chief market analyst at CMC Markets UK further pointed out how the US Treasury curve between 2 and 10-year debt inverted to its greatest extent since 2000 as a result.

Against that backdrop, the pan-European Stoxx 600 was trading 0.29% lower to 411.60 as of 0845 BST, alongside a 0.08% dip on the German Dax to 12,744.11.

Milan's FTSE Mib was off by 1.29% to 21,012.21 as the yield on the benchmark 10-year Italian government note rose by 20 basis points to 3.348%.

Yields on similarly-dated Spanish government debt meanwhile were 16bp higher to 2.41%.

"With bond markets increasingly pricing economic slowdown equity markets are struggling to make sense of what comes next when it comes to valuations, with the first test coming later today with JPMorgan Chase Q2 earnings numbers [which are due out later on Friday]," Hewson added.

"The second puzzle to navigate is how many more rate hikes are coming down the pipe before we see central banks cutting rates again."

In the background, front-dated Brent crude oil futures were drifting lower by 0.45% to $99.45 a barrel on the ICE.

Euro/dollar was 0.17% lower to 1.0042.

Due out at 1000 BST were Irish harmonised consumer price data for June.