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Title: European Stocks Largely Lower; Concerns Mount Over Eurozone CPI Release

May 31, 2022 03:44AM ET

By: AnalysisWatch

European stock markets traded cautiously on Tuesday ahead of the release of key eurozone inflation data that could intensify concerns about the pace and scope of upcoming interest rate hikes.

By 3:45 a.m. GMT, Germany's DAX was trading 0.7% lower, France's CAC 40 was down 0.9%, while Britain's FTSE 100 outperformed, rising 0.2%.

French inflation rose more than expected in May, with data released earlier on Tuesday showing consumer prices rose 0.7% in May for a new 12-month inflation record of 5.8%, up from 5.4% in April.

Economic data released on Monday showed that inflation in Germany hit a new all-time high, while Spain's data also beat estimates.

So attention turns to the latest flash estimate of eurozone inflation at 5 a.m. GMT, with economists expecting the consumer price index to set a new record of 7.7% in May, up from 7.4% in April.

The data come just over a week before a crucial European Central Bank meeting, where officials will announce the end of large-scale asset purchases and confirm plans to raise interest rates in July for the first time in more than a decade.

Earlier in the day, data showed that factory activity in China fell at a slower pace in May as COVID-19 restrictions eased in major manufacturing centers, with the official manufacturing purchasing managers' index rising to 49.6 in May from 47.4 in April.

In corporate news, Unilever (LON:ULVR) was in the spotlight after the consumer giant announced that it had appointed US activist investor Nelson Pelts as a non-executive director.

Its shares rose more than 7% as the move is a major concession to outside shareholders, who have long been pushing for greater outside influence on its strategy after suffering years of relative underperformance.

The EU agreed in principle late on Monday to cut Russia's oil imports by 90% by the end of 2022, managing to resolve a standoff with Hungary over the EU bloc's tougher sanctions on Russia over its invasion of Ukraine.

By 3:45 a.m. GMT, U.S. crude futures were trading 1.3 percent higher at $118.79 per barrel, while Brent crude was up 1.7 percent at $119.56.

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