European stocks up ahead of U.S. inflation data

London: European stocks rose on Tuesday as global markets awaited U.S. inflation data later in the session, which could provide an indication of whether global interest rates might start to fall.

At 1124 GMT, the MSCI World Equity index was up 0.1% at 667.98.

Asian stocks edged higher, with the MSCI's broadest index of Asia-Pacific shares outside Japan on course for a second straight day of gains.

The pan-European STOXX 600 was up by less than 0.1%, Germany's DAX was up 0.4%, but the FTSE 100 was down 0.4%.

Wall Street was set to open higher, with Nasdaq futures up 0.2% and S&P 500 futures up 0.1%.

The Israel-Hamas war turned traders’ risk-averse in October, but world stocks have recovered almost 5% so far this month as investors bet major central banks have ended a lengthy run of interest rate hikes.

U.S. Federal Reserve Chair Jerome Powell and other policymakers have said they are still not sure that interest rates are high enough to tame inflation.

U.S. Treasury yields edged lower, with the 10-year yield at 4.6201%.

Euro zone government bond yields were also down. The benchmark 10-year German yield was at 2.708%.

Asked how long rates would have to stay high to beat inflation, European Central Bank President Christine Lagarde said in an interview over the weekend that no change should be expected in the "next couple of quarters".

Wages in Britain grew slightly less quickly in the three months to September, official data on Tuesday showed. Wages previously rose at a record pace, leaving the Bank of England on alert for inflation.

The euro zone economy contracted marginally quarter-on-quarter in the third quarter, a new estimate confirmed, underlining expectations of a technical recession if the fourth quarter turns out equally weak, but employment still rose.

U.S. consumer price inflation data for October is due at 1330 GMT.

"The bond market is driving more or less everything," said Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management.

A higher inflation figure "might actually reverse the recent trend and push bond yields higher and perhaps add some pressure on equities and risk assets."

"If we get a weaker print, a softer print, the rally that we’ve seen could extend," he said.

In currencies, the U.S. dollar index was down by less than 0.1%, at 105.58., and the euro was up 0.2% at $1.07185.

The yen was stuck near its lowest level in three decades against the dollar, struggling to find a floor as the Bank of Japan's ultra-easy monetary policy settings remained at odds with the prospect of higher-for-longer rates elsewhere.

The pair was around 151.725, with the yen having recovered slightly from Monday's 151.92.

"We expect the Bank of Japan to move very, very gradually out of yield curve control and eventually out of negative rate policy, but this is unlikely to happen anytime soon," Pictet Wealth Management's Ducrozet said.

In the meantime, the pair is more likely to be driven by anything that moves the dollar, Ducrozet added.

Oil prices rose slightly after the International Energy Agency (IEA) raised its demand growth forecasts, adding to bullish sentiment from the previous day's OPEC guidance, with Brent crude futures at $82.63 a barrel, and WTI crude futures at $78.41.