Europe's stock markets advanced on Friday on news of slowing eurozone inflation and a UK economy performing slightly better than thought.
The dollar climbed before US inflation figures that should show how much impact the Federal Reserve's aggressive interest rate hikes are having in taming prices in the world's biggest economy.
The eurozone's annual inflation rate slowed sharply to 6.9 per cent in March from 8.5 per cent in February, beating expectations as energy prices eased, the EU's statistics agency said.
Inflation still remains well above the two per cent level targeted by the European Central Bank (ECB), despite falling from a peak of 10.6 per cent in October.
London stocks were boosted by upgraded data showing that the UK economy grew 0.1 per cent in the fourth quarter of last year to narrowly avoid recession. An initial reading had output flat in the final three months of last year.
The Bank of England and ECB have raised interest rates repeatedly to tame red-hot inflation but the size of the next hikes are unclear after recent turbulence in the commercial banking industry.
The eurozone data also showed eurozone core inflation, a key indicator that strips out volatile food and energy, edged up to 5.7 per cent.
"Headline inflation is coming down sharpish due to energy base effects – but core is rising and showing an extremely sticky tendency which is the real worry," noted Finalto analyst Neil Wilson.
Headline inflation is coming down sharpish due to energy base effects – but core is rising and showing an extremely sticky tendency which is the real worry- Finalto analyst Neil Wilson
In Asia, stock markets built on gains as banking-sector worries faded and traders grew optimistic that central banks could be near the end of their rate-hiking cycle.
With the financial turmoil of recent weeks subsiding, traders are refocusing on the battle against inflation, though expectations for how high borrowing costs will go have lowered.
The Fed had been tipped to push rates well above five per cent by the end of the year, but with credit seen narrowing in light of the latest upheaval, forecasts are for them to finish just above four per cent. That has helped push up global equities, which had been under pressure through February and March.
Hong Kong stocks were boosted also by a rally in tech firms after it emerged that e-commerce giant Alibaba's logistics arm was preparing for a listing in the city. News of the IPO by Cainiao Network Technology came after Alibaba said it intended to split into six units and go public.
Factory and services activity data suggesting that China's powerhouse economy continued to improve also lifted confidence.