New York (AFP) - European and US stock markets rose Monday as investors set aside Asian losses and focused on predictions for slowing inflation in Britain and the United States.
"The expectation is inflation will have eased slightly when the US and UK report tomorrow and Wednesday respectively," said AJ Bell investment director Russ Mould.
London finished up 0.8 percent at a record close of 7,942.72 points as it bears down on the 8,000 level.Frankfurt rose 0.6 percent and Paris climbed 1.1 percent.
Wall Street saw similar gains, with all three indices up more than one percent.
The yield on the 10-year US Treasury dipped in a sign that traders expect the Federal Reserve's rate-hiking streak to end relatively soon.
The Bank of England, the European Central Bank and the US Fed all ramped up interest rates last year in efforts to tame sky-high inflation.
While US inflation has been trending down for several months, data showed the jobs market remained very tight in January, indicating the world's top economy was still robust.
Strong employment numbers led some Fed officials to insist there was still plenty of work to do before they were satisfied they had prices under control.
"These comments were particularly noteworthy given that they explicitly pushed back against the narrative of rate cuts by year-end, which markets had started to assume would be coming fairly soon," said Michael Hewson at CMC Markets.
Nevertheless, the inflation numbers could be important, said Chris Beauchamp, chief market analyst at online trading platform IG.
"These have the potential to shift the narrative dramatically, and represent the next major possible turning point for equities," he said.
In Asia on Monday, equities fell amid nervousness over the week's economic data.
But sentiment in Europe was boosted by news that the eurozone economy was forecast to narrowly avoid recession this winter.
The 20-nation area's economy is now expected to expand by 0.9 percent instead of 0.3 percent, as "favorable developments" helped it weather fallout from Russia's invasion of Ukraine, the European Union's executive arm said.
Inflation in the eurozone is also expected to slow more than previously anticipated, reflecting the benefit of more temperate winter weather that has enabled markets to avert a sharp spike in natural gas prices -- previously seen as a potential worry.
Key figures around 2130 GMT
New York - Dow: UP 1.1 percent at 34,245.93 (close)
New York - S&P 500: UP 1.1 percent at 4,137.29 (close)
New York - Nasdaq: UP 1.5 percent at 11,891.78 (close)
London - FTSE 100: UP 0.8 percent at 7,942.72 (close)
Frankfurt - DAX: UP 0.6 percent at 15,397.34 (close)
Paris - CAC 40: UP 1.1 percent at 7,208.59 (close)
EURO STOXX 50: UP 1.0 percent at 4,241.36 (close)
Tokyo - Nikkei 225: DOWN 0.9 percent at 27,427.32 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 21,164.42 (close)
Shanghai - Composite: UP 0.7 percent at 3,284.16 (close)
Euro/dollar: UP at $1.0725 from $1.0678 on Friday
Pound/dollar: UP at $1.2140 from $1.2062
Euro/pound: DOWN at 88.33 pence from 88.52 pence
Dollar/yen: UP at 132.39 yen from 131.36 yen
Brent North Sea crude: UP 0.3 percent at $86.61 per barrel
West Texas Intermediate: UP 0.5 percent at $80.14 per barrel
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