European equities rise as traders wait for US inflation data

European shares rose in early trade on Wednesday after data pointing to softer inflation helped markets recover from last week's meltdown, while traders hoped that US inflation data later in the session would also be benign.

New Zealand's central bank cut interest rates for the first time in four years, and signalled more monetary policy easing to come. The move sparked a sell-off in the Kiwi dollar, which was down around 1% on the day .

The Japanese yen and the Nikkei wobbled after Japan's Prime Minister Fumio Kishida said he will step down next month, but Asian shares still rose overall as markets recovered from the recent rout.

At 0856 GMT, the MSCI World Equity index was up 0.3% on the day, at its highest in 12 days.

Europe's STOXX 600 was up 0.4% on the day, while London's FTSE 100 was up 0.5% after data showed British inflation rose less than expected in July.

UBS shares were up around 2.9% after it reported $1.1 billion of net profit in the April to June period, beating analyst's forecasts.

Last week's global market sell-off was widely attributed to fears of a U.S. recession, which left traders betting that the U.S. Federal Reserve would need to cut interest rates quickly to spur growth. Stocks and bond markets were also affected by traders quitting the yen carry trade, in response to the yen getting stronger following a surprise Bank of Japan rate hike.

U.S. data since then has eased recession fears. Stocks jumped on Tuesday after U.S. producer price data pointed to inflation cooling, which supported speculation that the Federal Reserve could cut interest rates soon.

U.S. CPI data is due at 1230 GMT (8:30 a.m. ET) and traders hope it supports the idea of Fed rate cuts. Markets are pricing in a roughly 52.5% chance of a 50 basis point rate cut, and a 47.5% chance of a 25 basis point cut, at the Fed's next meeting in September.