European shares rose on Thursday, buoyed by big overnight gains on Wall Street while the dollar and bond yields eased as investors eyed inflation and jobs data that could set the tone for U.S. monetary policy.
First up at 8:30 a.m. EST is the Federal Reserve's favored measure of inflation, core U.S. personal spending, which has taken greater significance after the U.S. central bank last week unexpectedly signaled growing concern about price rises.
"If core inflation risks are pushing higher, it will upset bonds by signaling the Fed could step up its action in May," analysts at Bear Stearns said in a client note.
Concerns about U.S. interest rate rises by as much as half a percentage point at a time, compared with recent quarter-point increases, have driven up the 10-year Treasury yield by about 60 basis points since mid-February and the dollar has put on over four percent against the euro since mid-March.
The position will be made clearer by Friday by the release of the March U.S. non-farm payrolls report and the Bank of Japan's tankan survey of business sentiment.
"Friday in particular is shaping up as a volatile day for the currency market," said Mitsuru Sahara, vice president of forex dealing at UFJ Bank in Tokyo.
"When you consider the chance of an unexpected rise in inflation or a strong jobs report, the risks to the dollar are most likely on the upside."
The core PCE index in February is expected to show a rise of 0.2 percent, in line with January and keeping the year-on-year pace at 1.6 percent.
As for payrolls, economists' median forecast is for 220,000 more jobs in March, below the 262,000 jobs added in February but still suggesting solid employment growth.