LONDON, Feb 12 Reuters European stocks opened higher on Monday and world stocks were steady at their highest in more than two years, as investors waited for U.S. inflation data due this week to give clues about when the U.S. Federal Reserve might cut rates.

The SP 500 rose above 5,000 points for the first time ever last week, boosted by tech stocks, and world equities have risen for three weeks straight, even though U.S. Treasury yields have edged higher recently as investors lower their expectations for how soon the Fed could cut rates.

With most major Asian markets closed for holidays, analysts said they expected a quiet day in markets as traders wait for U.S. inflation data on Tuesday, as well as British inflation data and euro zone GDP on Wednesday.

We are seeing markets dialling back expectations for rate cuts, said UBS multiasset strategist Kiran Ganesh, adding that markets were pricing fewer than five cuts in the U.S. this year, down from six or seven at the start of the year.

The equity market has remained relatively immune to that because the reason why weve seen less interest rate cuts expectations has been down to stronger economic growth which of course is good for equities as well.

Strong U.S. jobs data earlier in February meant investors reduced expectations for a Fed rate cut at its next meeting, with markets pricing an 84.5 chance of rates remaining unchanged in March.

At 0857 GMT, the MSCI world equity index, which tracks shares in 47 countries,…