* European shares inch up, but Iraq, data weigh * Most Asian markets down with U.S. outlook in spotlight * U.S. 10-year yield near 3-week low, German yield near 1-year trough * Canadian dollar at 6-month high following inflation surprise * Wall Street set for second week of losses in three By Marc Jones LONDON, June 27 (Reuters) - Concern about Iraq and Ukraine and subdued economic data left European shares facing their first week of losses since early April on Friday. Gold rose to near a two-month high.
Other safe-haven assets - the yen, Swiss franc and German and U.S. government bonds - were also in demand as investors backed away from the riskier bets they have been making for much of this year.
Stock rose slightly in London, Frankfurt and Paris but fell in Greece and Portugal. Losses earlier in the week meant European shares were set to bring a 10-week run of gains to an end.
Fighting between Iraqi forces and insurgents raged in the home town the late dictator Saddam Hussein and Russia warned of "grave consequences" as Ukraine signed a trade and political agreement with the European Union.
The uncertainty, along with a run of disappointing data this week, meant that Wall Street was poised for another subdued start and its second week of losses in the last three.
"Part of it was the GDP shock two days ago, then we get the soft consumer spending data," said Philip Marey, a U.S. focused economist at Rabobank. "A few weeks ago, there was this big exuberance and the sky was the limit and now those hopes have really faded." Gold was closing in on a fourth straight weekly gain at $1,315 an ounce, as the geopolitical unrest boosted its appeal and the soft U.S. data weakened the dollar.
On the other hand, any substantial slowdown in major economies could keep interest rates at record lows for longer. The mixed messages kept markets struggling for clarity.
"The advance has stopped for a while, but there has been no five or 10 percent correction," said Alvin Tan, a strategist at Societe Generale. "And that is a result of the environment of very low volatility we have at the moment." Investors were also digesting an unexpected drop in euro zone business and consumer confidence data and a small rise in German inflation numbers. Both are important for the European Central Bank's future policy.
The decline in sentiment confirmed recent PMI data, and underscored the low gear the 18-country bloc's economy was stuck in and the need for European leaders to accelerate growth plans.
OIL Not all market moves fitted with conventional wisdom.