FX.co ★ European Shares Seen Opening Up Ahead Of US Data Deluge

European stocks are poised for a strong start on Tuesday as investors anticipate a series of U.S. economic data releases that could provide further insight into the Federal Reserve's policy direction.

The U.S. Labour Department is set to release its report on producer price inflation for July later today, with the consumer price inflation report following on Wednesday. Both reports are expected to indicate a deceleration in annual price growth, which may strengthen the case for the Federal Reserve to reduce interest rates amid ongoing concerns about the economic outlook.

While the Fed is widely expected to cut interest rates next month, opinions are split among analysts on whether the reduction will be by a quarter or half percentage point.

Additional data that could impact investor sentiment includes Thursday's retail sales figures, comments from Fed officials, and key U.K. economic reports—namely, Wednesday's inflation data and Thursday's GDP report.

Germany will also release its economic sentiment survey results today. The ZEW economic confidence index is projected to drop to 38.0 in August from 41.8 in July.

In the U.K., unemployment data is expected, with forecasts suggesting the jobless rate will rise to 4.5 percent for the three months ending in June, up from 4.4 percent in the preceding period.

In Asia, stock movements were contained within a narrow range, although Japan's Nikkei index surged nearly 3 percent as traders resumed activity after a long holiday weekend. The stable yen supported exporters. Technology stocks, including Tokyo Electron, traded higher following a boost in the Philadelphia Stock Exchange Semiconductor Index by Nvidia Corp.

Gold prices dipped in anticipation of the forthcoming U.S. inflation data, while oil prices declined in Asian trading after gaining more than 3 percent in the previous session. Traders are monitoring the escalating conflict in the Middle East, as the U.S. forecasts potential attacks by Iran and its proxies on Israel as early as this week.

On Monday, U.S. stocks showed mixed performance following a volatile week. The Dow lost 0.4 percent, the S&P 500 edged up slightly, and the Nasdaq Composite advanced 0.2 percent, ahead of the key economic reports expected later this week.

European stocks also experienced mixed outcomes on Monday, with a focus on the upcoming U.S. and U.K. inflation data. The pan-European STOXX 600 ended the day flat with a slight negative bias. Germany's DAX closed marginally higher, the U.K.'s FTSE 100 gained 0.5 percent, while France's CAC 40 slipped 0.3 percent.