US Treasury bond yields are at a seven-year high, echoing a market correction in February when rising yields on risk-free government debt made equities less attractive.

"Given the rout in markets that started with Treasuries on Wednesday and has since reverberated throughout risk assets over the last 24 hours, you'd be hard-pressed to find a more conveniently timed payrolls Friday than today", Deutsche Bank strategists said in a note to clients.

At 0843 GMT, the pan-European STOXX 600 benchmark index was down 0.6 percent and set for its biggest weekly loss in a month. Germany's DAX also declined 0.4 percent and the UK's FTSE fell 0.7 percent.

Among the top movers was Danske Bank, which is facing a US criminal investigation into a 200 billion euro ($230 billion) money laundering scandal at its Estonian branch.

Shares in Denmark's biggest bank were down 8.7 percent after a rating cut by Credit Suisse.

The banking sector, which typically benefits from higher interest rates and rising yields, was nonetheless in the red, with a 0.7 percent decline.

Shares in Unilever lost 0.9 percent after its management announced a dramatic u-turn, withdrawing its move to the Netherlands.

There was no rebound for France's Kering, down 0.1 percent after the European luxury sector fell on concerns about the Chinese market.

Separately, the head of the Gucci brand has reassured shop staff over a looming slowdown in the pace of sales growth according to an internal video message seen by Reuters.

Among smaller companies, shares in Intu Properties soared 29 percent after a consortium, including British billionaire John Whittaker and Canada's Brookfield Asset Management, said it was considering a bid for the shopping centre owner.

Gold miner Centamin fell 8.3 percent after cutting its annual production target.