Positive week on U.S. inflation hopes

European markets advanced on Friday, building on gains from the previous session to notch their highest level since April 2022.

The pan-European Stoxx 600 was up 0.6% by late morning, with tech stocks adding 1.2% to lead gains while autos dropped 1.8% as the only sector in the red.

The European blue chip index closed Thursday’s trading up 0.7% at 450.22 points, its highest point since April 2022, after a choppy session following the latest U.S. inflation print.

The December consumer price index report was in line with economist expectations for a monthly dip of 0.1% but a 6.5% rise in consumer prices year over year, compared with a 0.1% monthly gain in November and an annual rise of 7.1%.

Investors around the world are closely monitoring inflation data for clues to how long and how far monetary policy tightening from central banks will go.

Federal Reserve Bank of Philadelphia President Ed Harker indicated in a speech Thursday that substantial hikes to interest rates are in the rearview, with inflation seemingly past its peak, suggesting that while the Federal Reserve will need to continue hiking, it could do so in 25 basis point increments at future meetings.

Shares in Asia-Pacific were mostly higher on Friday, though Japan’s Nikkei 225 slumped 1.25%, dragged down by a sharp decline for Uniqlo owner Fast Retailing as well as broad weakness in food and electronics stocks.

Stateside, stock futures were slightly lower in early premarket trading on Friday ahead of a suite of big bank earnings, with JPMorgan Chase, Wells Fargo, Citigroup and Bank of America all due to report before the bell on Wall Street.