The dollar held steady on Wednesday as investors awaited U.S. inflation statistics for clues on the Federal Reserve’s interest rate policy. Asian shares reached a six-month high during this time.

While Japan’s Nikkei (.N225) surged 1%, MSCI’s broadest index of Asia-Pacific shares outside of Japan (.MIAPJ0000PUS) increased as much as 0.82% to reach a six-month high of 538.56. S&P/ASX 200 index for Australia (.AXJO) increased by 0.90%.

The Eurostoxx 50 futures were up 0.54%, the German DAX futures were up 0.57%, and the FTSE futures were up 0.37%, suggesting that the positive mood in Europe was likely to continue.

In a speech on Tuesday, Fed Chair Jerome Powell avoided discussing rate policy but stated that the Fed’s independence was crucial for it to fight inflation, which helped U.S. markets close higher.

Equity markets rejoiced at the absence of any specific indication on policy because there was some expectation that Powell would likely push back on loosening financial conditions, according to Saxo strategists.

The Thursday announcement of the consumer price index (CPI) for the United States will be the center of investor attention. According to the data, headline annual inflation for December is predicted to be 6.5%, down from 7.1% in November.

The Fed’s decision to raise interest rates at its next meeting at the beginning of February will be heavily influenced by the data released on Thursday.

After four consecutive 75 bps rate increases in 2022, the U.S. central bank increased interest rates by 50 basis points in December, but it has reaffirmed that it will keep rates higher for longer to contain inflation.

According to Stephen Wu, economist at Commonwealth Bank of Australia, investors are expecting that the upcoming inflation report will show more deceleration, potentially allowing the Fed flexibility to decrease the rate of interest rate increases.

Kate: Direct Line declines as miners drive the FTSE 100 to nearly 4-year highs.

On Wednesday, the heavily exporter-weighted FTSE 100 of the UK rose to a level over four years while Direct Line fell after canceling its final dividend until 2022.

The more domestically oriented FTSE 250 mid-cap index (.FTMC) increased by 0.7% while the blue-chip FTSE 100 (.FTSE) rose 0.5% to its highest level since August 2018.

After the insurer said it is eliminating its final dividend for 2022 due to an increase in claims, Direct Line (DLGD.L) slumped 29.1%, on course for its worst one-day drop in history. This had a negative impact on peer Admiral (ADML.L), which fell 8.1%.

After a challenging year for the company, traders are aggressively dumping the shares due to the dividend’s cancellation, Victoria Scholar, head of investment at Interactive Investor, said.

As copper prices stayed close to their best in more than six months, aided by optimism about top consumer China’s plan to reopen its borders, industrial metal miners (.FTNMX551020) climbed 2.4%, with miners Glencore (GLEN.L) and Rio Tinto (RIO.L) jumping 2.6% and 1.9%, respectively.

Focus is still on the December U.S. CPI data, which is due on Thursday and is an essential first step in determining the Federal Reserve’s position on additional monetary policy tightening. Overnight, Fed Governor Michelle Bowman stated that in order to tackle excessive inflation, the central bank will need to hike interest rates further.

The FTSE 100, which is heavily weighted toward commodities, has had a strong start to the year thus far, advancing in five of the previous six trading sessions. In 2022, when commodity prices spiked, it outperformed key international counterparts.

After the clothing and footwear retailer reported total revenue growth of more than 20% for the six weeks leading up to Christmas, JD Sports (JD.L) increased 5.9%.

After the Daily Mirror publisher declared that Reach Plc’s annual operating profit would fall short of market estimates, the stock fell by 22% (RCH.L).

Sainsbury’s (SBRY.L) dropped 2% after the grocery chain predicted a full-year profit toward the top of its projected range and stated that its shares had been performing well prior to third-quarter results.