BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are likely to open on a
sluggish note Tuesday as investors ponder over a wider Middle East conflict and
the outlook for U.S. interest rates.

Israel is weighing possible response actions to Iran's aggression, but it is not
clear if a decision has been made.

Diplomatic options are also on the anvil as a military response to Iran could
pull Israel's attention and resources away from Gaza.

If Israel strikes back, the response speed from Iran 'will be less than a few
seconds,' said Ali Bagheri Kani, the deputy foreign minister of Iran for
political affairs.

The U.S. dollar climbed to more than five-month highs after Mary Daly, the
president of the San Francisco Federal Reserve Bank, said there is 'no urgency'
to cut interest rates.

Oil and gold prices traded higher in Asian trading as Israeli army chief General
Herzi Halevi (L) warned Iran's attack at the weekend would be 'met with a
response'.

Asian markets were deep in the red as mixed China data added to concerns over
rising bond yields.

China reported that GDP grew at a faster-than-forecast annual rate of 5.3
percent in the first quarter of the year, bolstering expectations the government
can hit its ambitious annual target.

At the same time, retail sales and industrial output numbers for March both fell
short of estimates - indicating feeble demand.

Unemployment data from the U.K., economic confidence figures from Germany and
U.S. reports on housing starts and industrial production may attract attention
later in the day along with remarks by Fed Chair Jerome Powell.

On the earnings front, Bank of America, Johnson & Johnson, Morgan Stanley and
UnitedHealth are among the prominent U.S. companies due to report their
quarterly results before the opening bell.

U.S. stocks fell sharply overnight to extend last week's sell-off while the
10-year yield jumped above 4.6 percent for the first time since November, as
robust gains in March retail sales figures combined with upward revisions in the
prior two months added to concerns about the outlook for interest rates.

The tech-heavy Nasdaq Composite and the S&P 500 plunged 1.8 percent and 1.2
percent, respectively to reach their lowest closing levels in almost two months,
while the Dow shed 0.7 percent to hit a nearly three-month closing low.

European stocks ended mixed on Monday as escalating Middle East tensions offset
a batch of encouraging regional economic data.

The pan European STOXX 600 inched up 0.1 percent. The German DAX rose half a
percent and France's CAC 40 edged up 0.4 percent while the U.K.'s FTSE 100
dipped 0.4 percent.



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