European shares failed on Thursday to follow overnight gains in the U.S. and China, while the U.S. benchmark 10-year Treasury yield was at its highest in over two months ahead of important inflation data.

Europe's broad Stoxx 600 index was down 0.17% on the day, and the German 10-year bund yield, the euro zone benchmark, nudged up to 2.28%, a five-week high, but the early market focus was on gains in China, spurred by hopes that a briefing this weekend will deliver anticipated fiscal stimulus.

U.S. CPI numbers are due at 1230 GMT. "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 U.S. growth in the third quarter - the Atlanta Fed's GDP 'nowcast' estimate is 3.2% - 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", said Broux.

Economists polled by Reuters see U.S. core inflation holding steady at a 3.2% year-on-year clip, and 0.2% month on month.

The U.S. 10-year yield was up 3 basis points at 4.009%, 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 several weeks against all of the euro, yen and pound.

U.S. share futures were down around 0.2% on Thursday after the S&P 500 and the Dow had both closed at record highs on Wednesday.

In Europe, the new French government was set to deliver its 2025 budget late on Thursday with plans for 60 billion euros' ($66 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.

Its recent highs have been above 80, but it had stood around 50 bps before President Emmanuel Macron called a parliamentary election in June.

CHINA

Chinese mainland shares got a lift early in the Asia session as China's central bank kicked off its 500 billion yuan 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 closed up just over 1%, after the previous day's 7% fall, which had been triggered by investor concern about the lack of details in the stimulus package.

Hong Kong's Hang Seng surged over 3%, after slipping 1.3% on Wednesday, and is up 26% this year.

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

"We believe the consensus is expecting around 2 trillion to 3 trillion yuan in ... fiscal stimulus measures," said Richard Tang, China strategist at Julius Baer.

Tang expected additional fiscal measures in coming weeks.

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 were 1.3% higher at $77.59 a barrel, while U.S. West Texas Intermediate (WTI) futures rose a similar amount to $74.19 a barrel.

Gold was 0.2% higher at $2,613 an ounce.

(Reporting by Ankur Banerjee in Singapore and Alun John in London, additional reporting by Suzanne McGee in New York; Editing by Muralikumar Anantharamanam, Sam Holmes, William Maclean, Kevin Liffey)