Europe midday: Stocks hold onto gains amid US dollar strength
European stocks are holding onto their early gains with all eyes on Wall Street futures following the long weekend in the States against a backdrop of rising government bond yields and a dip in the euro.
As of 1244 GMT, the benchmark Stoxx 600 was 0.17% or 0.66 points higher to 378.90, alongside a rise of 0.10% or 11.85 points to 12,397.70 on the German Dax and an advance of 0.16% or 8.47 points to 5,264.65 for the Cac-40.
Meanwhile, the S&P 500 'mini' futures contract was pointing to a 15.75 point drop on the benchmark US equity gauge to 2,734.50 and the yield on the benchmark 10-year US Treasury note was climbing three basis points to 2.90%.
The US dollar spot index was also higher, extending its recent bounce with a gain of 0.60% to 89.633, while euro/dollar was 0.59% lower to 1.2338.
In the headlines, market commentary had picked up on research from Morgan Stanley pointing out how in inflation-adjusted terms government bond yields in the US had yet to break-out from their recent trading range.
Hence, in their opinion, the early February correction in stocks had been just the "appetiser, not the main course".
Their comments came ahead of the sale of $55bn of 4-week bills scheduled for later on Tuesday.
Against that backdrop, Mike van Dulken at Accendo Markets said: "Global equities are lower after reports of the European Parliament wanting privileged single-market access for the UK post Brexit drove GBP higher, to the detriment of the FTSE100 which has extended its retreat from rebound highs.
"That said, fresh USD gains are already eroding this as we write. The flip-side is EUR weakness supporting Germany's DAX, which trades just above Feb rising support. This as we await stateside traders' return, to see whether Wall St wants to drive global sentiment even further south than the 1.5% that UK/German equity indices (and US futures) have already fallen from their highs."
Back in European news, Germany's Ministry of Finance reported that the year-on-year rate of advance in consumer prices in the euro area's largest economy slipped to 2.1% for January, versus 2.3% in December (consensus: 1.8%).
Also in Germany, the ZEW institute's economic confidence gauge for Germany in February slipped 2.6 points to a reading of 17.8 (consensus: 16.2).
Still ahead, Eurostat was scheduled to published its reading on euro area consumer confidence at 1400 GMT.
Arcelor Mittal stock was holding higher despite a Bloomberg report that its bid for Essar Steel India might be disqualified because when it filed its bid it still held a 29.1% stake in Uttam Galva, a company that was classified as a delinquent borrower.