A rebound in shares and oil lost steam on Wednesday after poorer prospects for German recovery sent the euro to its weakest level since July last year.
U.S. stock futures also pointed to a lower start on Wall Street where a bagful of data was in store ahead of the Thanksgiving holiday break.
Data on weekly jobless claims, durable goods and a second estimate of third-quarter GDP are due at 1330 GMT.
Personal consumption data for October, a key metric watched by the Federal Reserve to gauge consumer spending strength, is due at 1500 GMT.
Focus is also on minutes of the Fed's Nov. 2-3 meeting, due later in the day, for clues on the pace at which the central bank intends to taper COVID-era stimulus measures.
The STOXX index of 600 European companies had gained in early trading from Tuesday's three-week lows but momentum was sapped after gloomy German business sentiment, leaving the benchmark drifting in the red.
Germany's Ifo index of business sentiment in November was 96.5, compared with a Reuters consensus forecast of 96.6, helping to send the DAX Germany blue chip index down 0.6%. The euro was down 0.3%.
November was the fifth month running of falling German business morale, blamed on supply bottlenecks in manufacturing and a spike in coronavirus infections, raising the prospect of Europe's biggest economy stagnating in the fourth quarter.
"It was slightly below what the market has been forecasting, which is not surprising considered the high corona numbers and the low percentage of vaccinated people," said Rene Albrecht, a rates analyst at DZ Bank.
"Politicians are struggling on how to handle this situation - it's a bit of a mess. Bund yields are drifting sideways and this is definitely one of the factors."
The MSCI world stock index was down 0.16% at 748 points, just over 10 points below its lifetime high of a week ago
Share markets were nervous in Asia as trading was buffeted by a step-up in U.S. Treasury yields as well as volatile oil prices in the face of price-cooling moves by the United States and other nations.
Crude Goes Flat
Oil prices had risen in early trade in Europe, helping to lift heavyweight oil stocks, as investors remained skeptical about the effectiveness of a U.S.-led release of oil from strategic reserves in a bid to cool prices after repeated calls for more crude failed to sway OPEC+ producers.
But crude prices, like shares, also lost steam and Brent crude was down 0.3% at $82.08 a barrel, with U.S. crude futures off 0.1% at $78.41 a barrel.
Overnight, yields on 10-year U.S. Treasury notes rose more than 5 basis points (bps) to as high as 1.684%. Ahead of Wall Street's open yields traded at 1.6670%. Two-year U.S. Treasury yields were also firmer, having touched their highest level since March 2020 on Monday.
The U.S. dollar continued its upward trend on renewed bets the Fed will hike rates to tame inflation. The index rose 0.2% to 96.717 after touching a fresh 16-month high.
Gold eased 0.3% to $1,784 an ounce.
New Zealand's central bank raised interest rates for the second time in as many months on Wednesday, driven by inflationary pressures and as an easing of coronavirus restrictions supported economic activity.
However, with markets having been open to the possibility of a larger hike, the New Zealand dollar weakened 0.8% to $0.68920.
The Turkish lira remained under pressure, falling 7.5% to 11.84 per dollar, compounding its historic nosedive on Tuesday as President Tayyip Erdogan defended recent rate cuts and vowed to win his "economic war of independence."
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