Traders await US inflation test, China revives rally

European shares have failed to follow gains in the US and China, while the dollar sat near a two-month high before US inflation data.

Europe's broad Stoxx 600 index was down a whisker on Thursday, and the German 10-year bund yield, the euro zone benchmark, nudged up to a five-week high of 2.27 per cent.

However, the market focus was on gains in China spurred by hopes that a briefing this weekend will deliver anticipated fiscal stimulus.

US CPI is due later on Thursday.

"At stake is whether we get one or two more Fed cuts this year, or even none at all," said Kenneth Broux, head of corporate research FX and rates at Societe Generale.

He said the re-acceleration of US growth in the third quarter - the Atlanta Fed's GDP estimate is 3.2 per cent - and the tightening of the labour market in September "suggest disinflation may be stalling".

A "punchy" core reading "could cause a second wobble in the bond market", Broux said.

The US 10-year yield was up 2 bps at 4.084 per cent, its highest since late July.

It has jumped 24 bps in the past week, largely on the back of a Friday's much hotter-than-expected payrolls data.

That, in turn has helped the dollar to its strongest in weeks against the euro, yen and pound.

US share futures were down about 0.1 per cent on Thursday after the S&P 500 and the Dow had both closed at record highs on Wednesday.

One thing that was on the agenda in Europe was France, where the new government is to deliver its 2025 budget late on Thursday with plans for 60 billion euros ($A98 billion) worth of tax hikes and spending cuts to tackle a spiralling fiscal deficit.

The now-closely watched spread between French and German government bonds, a gauge of how much premium investors demand for holding French debt, was steady at 76 bps.

The start of the day was all about China, and mainland shares got a lift early in the Asia session as China's central bank kicked off its 500 billion-yuan ($A105 billion) facility to spur capital markets, a plan it announced in late September as part of a series of stimulus measures.

China's blue-chip CSI300 index failed to hold all those gains, and the index closed up just more than one per cent after the previous day's seven per cent fall, which was triggered by some investor concern about the lack of details in the stimulus package.

Hong Kong's Hang Seng surged more than three per cent, after slipping 1.3 per cent on Wednesday and is up 26 per cent in 2024.

The market's attention is now firmly on a finance ministry news conference on Saturday that will provide details of the fiscal stimulus plan.

It's been a volatile week for Chinese markets.

Mainland shares rallied to two-year highs on Tuesday after the long National Day holiday but quickly lost steam as the lack of details on stimulus measures dealt a blow to market enthusiasm.

Benchmark indices in China then notched their biggest daily losses on Wednesday since the COVID-19 pandemic began.

In commodities, oil prices rose as investors contended with rising tensions in the Middle East and its impact on oil supply, as well as a spike in demand as a major storm barrelled into Florida.

Brent crude futures was one per cent higher at $US77.34 a barrel, while the US West Texas Intermediate futures rose a similar amount to $US73.98 a barrel.

Gold was 0.3 per cent higher at $US2,615 an ounce.