European equities drifted after a decline in Asia as investors sought to rebuild their confidence amid Italy's muddled political outlook and uncertain trade patterns. The dollar fell while the euro climbed as Italian bond yields fell.
The Stoxx Europe 600 Index lost an early profit despite a more positive sentiment in Asia. The MSCI Asia Pacific Index rebounded after reaching its lowest level since February on Wednesday. Hong Kong and Chinese equities outperformed as China's official production indicator underpinned robust growth despite the debt brake and trade tensions. 10-year US yields were above 2.85 percent.
In the midst of political and trade turmoil, the next focus for traders might well be the US labor market report on Friday, the last before the next Federal Reserve meeting next month, for the seventh time since the end of 201
"Over the summer, we will face great uncertainty," said David Ader, chief macro strategist at Informa Financial Intelligence, to Bloomberg Television. "I do not see that we have a big directional game at this point in time, and I see a lot of uncertainty leading to high volatility."