European markets are set to open fractionally higher on Friday as global markets shrug off a sharp rise in U.S. inflation, with many strategists believing it to be transitory.

Britain's FTSE 100 is seen around 10 points higher at 7,098, Germany's DAX is set to climb around 28 points to 15,599 and France's CAC 40 is expected to gain around 7 points to 6,553, according to IG data.

Markets in Asia-Pacific were muted in overnight trade after the S&P 500 sailed to fresh record highs stateside on Thursday. U.S. stock futures were flat in early premarket trade Friday.

The U.S. Labor Department reported a 5% annual increase in its headline consumer price index on Thursday, its fastest rise since 2008. Core inflation, which excludes food and energy prices, rose 3.8% to notch its sharpest increase in nearly three decades.

Investors have been closely watching inflation figures to gauge whether the U.S. Federal Reserve will begin tapering down its unprecedented monetary stimulus program. However, strategists have suggested there is enough evidence in Thursday's data to sustain the Fed's assertions that hotter-than-expected inflation will be transitory.

"Within the data, strong contribution continues to come from sectors that are rebounding quickly with pandemic restrictions easing," said Charlie Ripley, senior investment strategist at Allianz Investment Management.

"Additionally, it is still evident that supply chain issues are taking a toll on some sectors with used car prices increasing 7.3% over the month. Figures like today's CPI will certainly be raising eyebrows at the Fed, but the bottom line is they will likely need additional evidence to determine whether upward inflation pressures will be more persistent."

A Reuters poll of economists published Thursday found that a majority expect the Fed to announce in August or September a reduction to its massive bond buying program, with cuts to monthly purchases beginning early in 2022.

Back in Europe, G-7 (Group of Seven) leaders meet on Friday in Cornwall, U.K., with British Prime Minister Boris Johnson expecting the collection of the world's largest economies to agree to donate 1 billion Covid-19 vaccine doses to developing countries.

U.K. GDP climbed 2.3% month-on-month in April, according to an initial estimate published Friday, slightly exceeding expectations. The Office for National Statistics said GDP remains 3.7% below its February 2020 pre-pandemic level, but is now 1.2% above its initial recovery peak in October 2020.

Industrial, manufacturing and construction outputs for April came in considerably lower than expected, however.

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