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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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European stock futures rally 1%, Wall St futures gain

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Oil nurses heavy losses, euro outperforms

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Nikkei gains 1.1% on weaker yen

By Stella Qiu

SYDNEY, Feb 13 (Reuters) - U.S. and European stock

futures rallied on Thursday on optimism over prospects of a

peace deal between Ukraine and Russia, offsetting a jump in

Treasury yields as hot inflation threatens to close the door to

any policy easing in the U.S. this year.

Global trade war fears persisted as U.S. President

Donald Trump said he would impose reciprocal tariffs as soon as

Wednesday evening on every country that charges duties on U.S.

imports. Gold prices hovered not far from their record highs.

The Japanese yen was the biggest loser in the face of

higher U.S. yields, while the euro has been helped by Trump's

phone calls with Russian President Vladimir Putin and Ukraine's

Volodymyr Zelenskiy, raising hopes that the years-long war could

be nearing an end.

Oil prices dropped, having been down more than 2%

overnight. Wall Street staged a late rally to end the day mixed.

In Asia, EUROSTOXX 50 futures climbed 1%.

Nasdaq futures rose 0.4% while S&P 500 futures

gained 0.2%. Japan's Nikkei gained 1.1% while MSCI's

broadest index of Asia-Pacific shares outside Japan

edged up 0.3%.

"The optimism is probably somewhat premature," said Kyle

Rodda, a senior analyst at Capital.com.

"Early drafts of a peace deal by the United States included

commitments from the Ukrainians not to push for NATO membership

and to give up territory. Such a concession is a large ask,

especially given the lack of trust that the Russians will commit

to peace after Trump leaves office."

Chinese blue chips were flat but Hong Kong's Hang

Seng index extended its bullish run, up 1% to hit another

four-month high.

Overnight, data showed U.S. consumer prices rose by the

most in nearly 1-1/2 years in January. The closely watched core

inflation index, which excludes food and energy prices, rose

0.4% in the month, above forecasts for 0.3%.

With the Federal Reserve already signalling no rush to cut

rates further, investors scaled back expectations of more policy

easing from the Federal Reserve this year to just 28 basis

points, equivalent to just one cut.

Treasury yields jumped on the inflation data, with 10-year

yields up 10 basis points overnight to a three-week

top of 4.66%. They were down 2 bps on Thursday at 4.6151%.

Analysts at Barclays still expect one rate cut from the Fed

this year.

"Risks are now skewing toward the Fed delivering no cuts

this year, and we are putting somewhat more weight on

off-baseline scenarios where rate hikes enter the conversation,"

they said in a note to client.

In the foreign exchange market, the dollar held at

154.52 yen, having jumped 1.3% overnight as U.S.

yields shot up. The euro fared much better, having

recovered from earlier falls to be 0.2% firmer for the day and

was 0.1% higher at $1.0392 on Thursday.

In commodities markets, oil prices extended their overnight

slump on hopes for a peace deal between Russia and Ukraine that

would mean the end of sanctions that have disrupted supply

flows.

U.S. crude fell 0.7% to $70.88 a barrel, after

dropping 2.7% overnight and Brent was also 0.7% lower at

$74.66, having dropped 2.4% overnight.

Gold was flat at $2,902 per ounce, not far from

its record high of $2,942.7 hit on Tuesday.