LONDON: Stock markets largely steadied Wednesday on the eve of keenly-awaited US inflation data and a European Central Bank policy meeting as traders seek clues on the timing of higher interest rates which could hinder economic recovery.

Global equities have been in a holding position this month as traders try to determine the outlook for central banks' policies amid concerns that a spike in prices as economies emerge from lockdowns could raise borrowing costs.

Price inflation of goods leaving Chinese factories rose at the highest rate in more than a decade last month, official data showed Wednesday, as the world's second-largest economy worked to contain a surge in commodity prices.

All eyes were now on US inflation figures due Thursday.

"The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers," said Fiona Cincotta of City Index.

"Whilst the Fed reassures that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market."

Thursday also sees the ECB's latest decision on policy, with analysts not expecting any changes but looking for any shifts in its outlook as the recovery presses ahead.

"It's an opportune time for a thorough review given the improved state of both the economy and the vaccination rollout," said National Australia Bank analyst David de Garis.

"While there's no denying the better run of data... prudence around the pandemic, including from variants, also argues for a degree of policy caution."

Hopes for another bump in demand were given a boost after the United States eased a travel warning for dozens of countries including European nations and Japan as vaccinations allow people to return to a semblance of normality.

Markets were looking ahead also to the start Friday of a summit of the G7 wealthy nations.

The gathering in England will be Joe Biden's first foreign trip of his US presidency.

British Prime Minister Boris Johnson, host of the summit featuring leaders also from Canada, France, Germany, Italy and Japan, is set to urge the seven nations to vaccinate the whole world against coronavirus by the end of 2022.

Key figures at 1045 GMT -

London - FTSE 100: DOWN 0.6 percent at 7,054.73 points

Frankfurt - DAX 30: DOWN 0.5 percent at 15,562.91

Paris - CAC 40: FLAT at 6,549.15

EURO STOXX 50: DOWN 0.2 percent at 4,088.66

Tokyo - Nikkei 225: DOWN 0.4 percent at 28,860.80 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 28,742.63 (close)

Shanghai - Composite: UP 0.3 percent at 3,591.40 (close)

New York - Dow: DOWN 0.1 percent at 34,599.82 (close)

Euro/dollar: UP at $1.2191 from $1.2179 at 2115 GMT

Pound/dollar: UP at $1.4173 from $1.4149

Euro/pound: DOWN at 86.01 pence from 86.03 pence

Dollar/yen: DOWN at 109.45 yen from 109.49 yen

Brent North Sea crude: UP 0.2 percent at $72.33 per barrel

West Texas Intermediate: UP 0.2 percent at $70.16 per barrel