San Francisco Frontiers - European stock markets mostly climb as eurozone inflation eases

The Euro-area annual inflation rate slowed to 2.6 percent last month from 2.8 percent in January on weaker food and drink price rises, official data showed before next week's rate decision from the European Central Bank (ECB).

The print missed expectations of 2.5 percent.

The Frankfurt-based central bank is under pressure to cut rates after keeping them unchanged since October at a two-decade high.

"With inflation coming in above estimates, traders will be keeping a close eye out for any change in stance from the ECB at Thursday's monetary policy announcement," noted Shore Markets analyst Joshua Mahony.

"While today's data looks unlikely to lessen the chance of a June rate cut, it does dampen any calls for a speedy return to easing in April."

Markets are eagerly following data for a steer on when both the ECB and US Federal Reserve might start cutting their key rates as inflation cools.

Asian markets mostly rose Friday following Wall Street gains as key US inflation data met investors' expectations.

Fresh personal consumption expenditures (PCE) price index figures on Thursday helped shore up confidence that long-awaited Fed rate cuts were likely this year.

The PCE, the Fed's preferred inflation gauge, increased at an annual rate of 2.4 percent in January, down from 2.6 percent in December, the Department of Commerce said.

The closely watched "core inflation" measure, which removes volatile food and energy costs, increased by 0.4 percent from the month before, indicating an uptick in underlying inflation from December to January.

Easing pressures could move the Fed to begin cutting rates sooner rather than later, although reduction expectations have gradually been pushed to later this year with US inflation holding above the Fed's two percent target.

"While central banks remain data dependent, we need to get other pieces of the puzzle before we can get a clearer picture of what central bankers will do next," noted XTB analyst Kathleen Brooks.

"This means that next week's ECB meeting and US labour market report will be crucial."

On Wall Street, the tech-linked Nasdaq set a new record, surpassing a 2021 high, boosted by optimism surrounding artificial intelligence (AI) technology.

New York's two other major US indices also rose.

Asia meanwhile jumped on Friday with Tokyo's benchmark Nikkei index almost touching 40,000 points for the first time.

Shanghai and Hong Kong closed higher and markets in Sydney, Mumbai and Bangkok also rose, as traders shrugged off more downbeat data out of China.

Factory activity in China contracted for the fifth straight month in February, official figures showed Friday, as sluggish demand in the world's second-largest economy continues to drag on growth.

The purchasing managers' index, a key barometer of factory output, was 49.1 percent last month, indicating a contraction in activity.

- Key figures around 1130 GMT -

London - FTSE 100: UP 0.7 percent at 7,681.55 points

Frankfurt - DAX: UP 0.4 percent at 17,754.53

Paris - CAC 40: DOWN 0.1 percent at 7,922.38

EURO STOXX 50: UP 0.2 percent at 4,885.40

Tokyo - Nikkei 225: UP 1.9 percent at 39,910.82 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 16,589.44 (close)

Shanghai - Composite: UP 0.4 percent at 3,027.02 (close)

New York - Dow: UP 0.1 percent at 38,996.39 (close)

Euro/dollar: UP at $1.0814 from $1.0805 on Thursday

Dollar/yen: UP at 150.37 yen from 149.98 yen

Pound/dollar: UP at $1.2634 from $1.2625

Euro/pound: UP at 85.59 pence from 85.58 pence

Brent North Sea Crude: UP 1.4 percent at $83.11 per barrel

West Texas Intermediate: UP 1.5 percent at $79.41 per barrel

burs-rfj/bcp/rl

A.Clark--SFF