US Markets

Wall Street turns focus to CPI for rate clues

Wall Street on course for best week in months

U.S. stock markets were tipped to open lower on Friday, giving up some of the previous day's gains ahead of inflation data that could offer clues on the timing of a U.S. rate rise.

There was also focus on Germany's parliament, which is set to vote on starting discussions over the reform-for-aid package agreed for Greece at the start of the week. Germany is one of several countries in the euro area that must vote for the rescue deal to go ahead.

The European Central Bank, meanwhile, said on Thursday it would increase emergency liquidity to Greek banks, which will reopen on Monday after being closed for three weeks.

Stock index futures were in negative territory during early London trade, with Dow Jones industrial average futures down almost 40 points.

Traders work on the floor of the New York Stock Exchange.
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General Electric, Honeywell and SunTrust are among the U.S. firms reporting earnings before markets open on Friday.

U.S. markets are expected to return their gaze to the economic outlook at home with the release of the June consumer price index (CPI) at 08:30 a.m. ET. June building permits data are also released at that time, while the June consumer sentiment index is due out at 10:00 a.m.

Read MoreTraders watch for whiff of inflation

The data come a day after Federal Reserve Chair Janet Yellen reiterated that U.S. interest rates are likely to rise this year depending on economic conditions.

"The consensus (for the CPI) is (a rise of) 0.3 percent month-on-month and 0.2 percent core," analysts at Rabobank said in a note. The core CPI measure strips out food and energy prices.

"Clearly the Fed is minded to hike regardless, but an upside surprise here might see further momentum back towards the dollar," Rabobank added.

The Fed has kept interest rates at a record low near zero since the global financial crisis and speculation about a rate hike has helped boost the dollar this year.

On Thursday, the currency hit a six-week high against other major currencies, but was a touch softer on Friday with the dollar index hovering at 97.52.

Wall Street shares closed higher on Thursday, with the Nasdaq Composite closing at a record high on the back of upbeat earnings news.

Google, which reported earnings after Thursday's market close, posted quarterly profits that topped analyst expectations.

Read MoreGoogle shares jump as profits handily beat expectations

Elsewhere, European shares gave up early gains to trade lower as a note of caution set in ahead of Germany's parliamentary vote on the Greek bailout deal. In Asia, stock markets closed mostly higher thanks to the positive lead from Wall Street overnight.