Sharecast - The FTSE 100 was called to open 16 points higher at 7,859.
CMC Markets analyst Michael Hewson said: "European markets underwent another positive session yesterday, driven by outperformance from the luxury sector, with the CAC 40 closing at new record highs, while the DAX and FTSE100 also eked out some modest gains.
"Another big fall in US inflation, this time in headline PPI for March as well as core prices is fuelling optimism that we could start to see a similar effect filter down into the CPI numbers in the coming months, thus bringing us closer to possible rate cuts later this year.
"This may well be true, however with the US labour market still holding up reasonably well it’s hard to imagine the Federal Reserve will be in any rush to cut rates while the US economy continues to hold up reasonably well on the jobs front.
"This looks set to translate into a positive European open later this morning."
US retail sales data for March are due at 1330 BST, while first-quarter results from JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) are out later.
In UK corporate news, iconic boot maker Dr Martens lowered profit guidance for the second time in four months due to higher costs at its Los Angeles distribution centre and lower wholesale revenues.
The company, which issued a profits warning in January, said it now expects core earnings of £245m for the full year, down from a previous range of £250m to £260m.
Fourth-quarter wholesale revenue was down due mainly to Los Angeles distribution centre operational issues and planned shipment reduction to Dr Martens’ China distributor, offset in part by growth in EMEA, the company said in a trading statement.
Elsewhere, online electricals retailer AO World said it expects full-year profit to be around the top end of its range of £37.5m to £45m as it continues to see positive traction from its initiatives to cut costs and improve margins.