Europe Stocks Expected To Track Wall Street Losses

European stocks were set to dip Friday, tracking losses on Wall Street and in Tokyo, with heavyweight resource-related shares feeling the pinch of lower commodity prices.

Sharon Lorimer

European stocks fell on Thursday, from the previous session's 28-month highs, on concerns euro zone inflation pressures could spark a rise in interest rates, while miners were hit by the waning outlook for Chinese copper demand

The European Central Bank and the Bank of England held interest rates at record lows on Thursday, but ECB President Jean-Claude Trichet warned that the euro zone economy faces short-term inflationary pressures.

Although they should be contained in the long-term, close scrutiny is warranted, he told a news conference on Thursday.

Spain attracted strong demand at an auction of 5-year bonds on Thursdaywhile the yield came in lower than expected, reflecting growing hopes that euro zone governments will take fresh action to ease the region's debt crisis.

Elena Salgado, Spain's finance minister, told CNBC in an interview that the country would not need a bailout from the European Union and the International Monetary Fund, but the issue will remain in focus on Friday.

The European Commission is due to release November unemployment data for the euro zone on Friday, as well as a numbers on economic growth in the region in the third quarter.

Spain is set to publish inflation data for December, while Germany releases foreign trade data and its industrial production index, both for November.

December car registration numbers for the UK should provide an indication of the strength of the automobile sector, which was hit hard by the downturn.