Volkswacht Bodensee - Stock markets rise with inflation on radar

Oil prices jumped around two percent on a report that OPEC and its Russia-led allies could decide at a meeting Thursday to deepen production cuts as a weak global economy weighs on demand.

Eyes were on the release Thursday of the Federal Reserve's preferred measure of US inflation, the personal consumption expenditures index.

Forecasts point to a further retreat of the PCE.

"The Fed could find themselves in a 'sweet spot'," said Jeffrey Roach at LPL Financial.

"Inflation is trending lower, the consumer is still spending -- but at a slower pace -- and the Fed could end its rate hiking campaign without much pain inflicted on the economy."

Traders are predicting a US rate cut in the first half of next year although Thursday's reading could alter the outlook.

Observers say signs the world's top economy is feeling the effect of long-running monetary tightening has given the bank room to take a more dovish approach to fighting inflation, which is sharply down from the four-decade highs seen in 2022.

That, combined with several Fed decision-makers indicating they are in favour of holding rates where they are, has given a much-needed shot of confidence to traders at the end of a tough year.

Official data Thursday showed inflation in the eurozone has hit the lowest level in more than two years.

Consumer prices increased 2.4 percent in November across the 20-nation bloc that shares the euro, the lowest since July 2021.

The data will provide comfort to the European Central Bank, which has paused an unprecedented streak of interest rate hikes aimed at taming red-hot inflation.

The euro retreated against the dollar and British pound as the inflation reading raised expectations that the Frankfurt-based ECB could consider cutting rates soon.

Separate data showed the economy of eurozone member France contracted slightly in the third quarter, adding to worries about a possible global recession next year.

- Key figures around 1115 GMT -

London - FTSE 100: UP 0.5 percent 7,463.69 points

Paris - CAC 40: UP 0.4 percent at 7,294.34

Frankfurt - DAX: UP 0.3 percent at 16,216.11

EURO STOXX 50: UP 0.3 percent at 4,382.03

Tokyo - Nikkei 225: UP 0.5 percent at 33,486.89 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 17,042.88 (close)

Shanghai - Composite: UP 0.3 percent at 3,029.67 (close)

New York - Dow: UP less than 0.1 percent at 35,430.42 (close)

West Texas Intermediate: UP 2.1 percent at $79.46 per barrel

Brent North Sea crude: UP 1.9 percent at $84.69 per barrel

Euro/dollar: DOWN at $1.0914 from $1.0978 on Wednesday.

Pound/dollar: DOWN at $1.2641 from $1.2698

Dollar/yen: UP at 147.70 yen from 147.22 yen

Euro/pound: DOWN at 86.32 pence from 86.43 pence

F.Wagner--VB