European Shares Seen Tad Higher Ahead Of US Inflation Data

(RTTNews) - European stocks are likely to open higher on Friday, though the upside may remain capped somewhat after three Fed officials kept the door open to more rate hikes to lower high levels of inflation.

While Boston Fed President Susan Collins expects one more quarter-point rate increase, Richmond Fed President Thomas Barkin said he remains undecided on how to adjust rates at the May meeting.

Minneapolis Fed President Neel Kashkari said the Fed needs to focus on lowering inflation back to 2 percent and that it's not yet fully clear what impact the collapse of Silicon Valley Bank will have on the economy.

The U.S. inflation reading contained in the personal income and spending report is likely to be in the spotlight today, along with other reports on consumer sentiment and Chicago-area business activity.

Asian stocks followed Wall Street higher amid bets that the Fed will be forced to cut rates as early as mid-year to shore up economic growth.

China's manufacturing activity beat expectations in March and services growth hit a 12-year high, echoing Premier Li's upbeat remark on the growth outlook at his speech the previous day.

Elsewhere, Japan reported strong industrial output and retail sales data.

The dollar was on track to post a second consecutive quarterly loss while oil and gold prices were little changed.

U.S. stocks rose for a second straight session overnight as bank worries faded and Fed officials reiterated their resolve to lower inflation.

Jobless claims grew more than expected last week, while the economy grew at a slower pace in the fourth quarter than initially estimated reflecting downward revisions to exports and consumer spending, separate reports showed.

The tech-heavy Nasdaq Composite rose 0.7 percent and the S&P 500 added 0.6 percent to reach their best closing levels in over a month while the Dow edged up 0.4 percent.

European stocks rose to near three-week highs on Thursday, with sentiment boosted by weaker-than-expected regional inflation data, upbeat results from retail giant H&M and hopes that the banking crisis is contained.

The pan European STOXX 600 climbed 1 percent. The German DAX surged 1.3 percent, France's CAC 40 rallied 1.1 percent and the U.K.'s FTSE 100 gained 0.7 percent.