GLOBAL MARKETS-Strong German data helps European shares recover; Wall Street futures subdued

* Reuters Live Markets blog: LIVE/
* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

(Updates prices, adds commentary and detail)
By Elizabeth Howcroft
LONDON, Feb 24 (Reuters) - European shares rose but U.S.
stocks futures pointed to a further tech sell-off in Wall
Street, as market participants weighed up signs of economic
recovery against fears of inflation.
Falling tech stocks pulled Asian markets lower overnight, as
recent gains in U.S. Treasury yields put lofty valuations under
pressure. In his testimony before the U.S. Senate on Tuesday, Federal
Reserve Chair Jerome Powell did not seem too worried about
rising yields, telling Congress they were a statement on the
market's confidence in the pandemic recovery. "Powell's comments reinforce our view that the increase in
inflation expectations is most likely transitory and that higher
Treasury yields primarily reflect optimism over the economic
recovery and the reflation trade," wrote UBS chief investment
officer for global wealth management, Mark Haefele, in a note to
clients.
"Investors should expect an extended period in which
interest rates remain below inflation."
European indexes recovered some recent losses, with the
STOXX 600 up 0.3% at 1150 GMT, but still down almost 2% from the
one-year high it hit last week .STOXX .
Germany's DAX was up 0.7% .GDAX , helped by
stronger-than-expected GDP gains in Europe's largest economy.
The FTSE 100 was up 0.1% .FTSE . The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was down 0.3%.
U.S. futures pointed to a mixed open for Wall Street
EScv1 , with S&P 500 e-minis up 0.1% EScv1 but futures for
the tech-heavy Nasdaq in decline for the seventh consecutive day
NQcv1 . "We're seeing a modest recovery at this point, so there's
still clearly a lot of caution," said Craig Erlam, senior market
analyst at OANDA, who said the stock market falls this week were
largely a "blip".
"I think central banks are going to continue to talk down
tightening prospects," he added.
The 10-year U.S. Treasury yield rose, although it was below
the one-year high it reached on Monday US10YT=RR .
Tech stocks are particularly sensitive to rising yields
because their value rests heavily on earnings in the future,
which are discounted more deeply when bond returns go up.
Bitcoin recovered somewhat, up 3.3% at around $50,481 at
1202 GMT BTC=BTSP . "I suspect we are in a bubble in certain places, that
stimulus cheques will provide more fire to that at some point
but that risk assets are going to be constantly buffeted by the
risk of higher yields and inflation regardless of whether it has
any structural roots or not," wrote Deutsche Bank strategist Jim
Reid in a note to clients.
But, one year on from the start of the COVID-19 market
crash, financial market participants were generally upbeat about
the prospect of vaccine rollouts, lockdowns ending and economies
re-opening.
Strong exports and solid construction activity helped the
German economy to grow by a stronger-than-expected 0.3% in the
final quarter of last year, the Federal Statistics Office said
on Wednesday, revising up an earlier estimate. U.S. consumer confidence increased in February and Britons
rushed to book foreign holidays after the government laid out
plans to relax restrictions. But EU government leaders will
agree on Thursday to maintain curbs on non-essential travel
within the bloc. OANDA's Craig Erlam said that market consensus is that there
will be no further lockdowns in Europe and the United States
after the summer.
"Markets are working on the assumption that we are at the
end of the tunnel, we're right near the end of the tunnel, and
we're not going back in," he said.
The dollar was broadly flat against a basket of currencies
=USD , while euro-dollar was slightly up at $1.2166 EUR=EBS .
The benchmark 10-year German Bund was steady DE10YT=RR .
Elsewhere, oil prices rose, although a surprise build-up in
U.S. inventories last week limited the gains. Brent and U.S. West Texas Intermediate (WTI) crude futures
have both risen by around 28% so far in 2021 LCOc1 CLc1 .

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Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
Up and away: global bond yields on the rise https://tmsnrt.rs/3kesTqW
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