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Investing.com - European stock markets traded in a mixed fashion Tuesday, with U.K.

markets returning from a break, as investors awaited key inflation data on both sides of the Atlantic for clues over future monetary policy. At 03:10 ET (07:10 GMT), the DAX index in Germany traded 0.2% higher, while the CAC 40 in France fell 0.



1% and the FTSE 100 in the U.K. dropped 0.

1%. Key inflation data in focus The FTSE 100 is underperforming Tuesday after U.K.

markets returned from Monday's late May bank holiday, but sentiment is generally positive after dovish comments from a series of ECB officials. The European Central Bank has plenty of room for rate cuts and current market expectations for easing over the long-run are reasonable, ECB policymaker Francois Villeroy de Galhau said in a newspaper interview on Monday. The ECB has virtually guaranteed an interest rate cut in June, but uncertainty over what follows remains.

The central bank will cut interest rates at a slower or faster pace depending on the strength of underlying inflation and demand, ECB chief economist Philip Lane said on Monday. With this in mind, the latest eurozone inflation release is due on Friday, and is expected to tick up 2.5% in May year-on-year, from 2.

4% in April, while underlying inflation is seen holding steady at 2.7%. Across the pond, the Fed’s favourite inflation gauge - the personal consumption expenditures price index - is also due on Friday, and will be closely watched for clues about the direction .

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