(Bloomberg) — European stocks fell as a spike in bond yields dented risk appetite ahead of key US data later this week.

The Stoxx Europe 600 Index retreated 0.6% as of 10:48 a.m. in London. The consumer and energy sectors outperformed, while real estate as well as travel and leisure were among the biggest laggards. 

Global bonds staged a broad retreat, led by sharp declines in longer-dated debt. The yield on 30-year Treasuries climbed four basis points to 4.97%, while their UK counterparts hit the highest since 1998 amid Prime Minister Keir Starmer’s struggle to restore market confidence.

Hawkish comments by European Central Bank rate-setter Isabel Schnabel and the euro area’s latest inflation reading indicated that the central bank won’t cut rates at its next policy meeting.

“Inflation is not coming down sufficiently anywhere in the developed world and this is affecting financial conditions, resulting in softer equities as holdings look ever more concentrated in certain sectors,” said Geoff Yu, FX and macro strategist for EMEA at BNY Mellon.

European stocks have lost steam on concerns about political developments in France after nearing record highs last month. Traders will be watching US jobs data this Friday, with the unemployment rate expected to tick up to an almost four-year high.

Among individual stocks, Nestle SA shares pared declines after falling as much as 3.6% as the firm ousted CEO Laurent Freixe because of an undisclosed workplace affair.

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–With assistance from Michael Msika.

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