(fxcue news) - European stocks are likely to open on a firm note Tuesday as investors await a slew of U.S. economic data for additional clues on the Federal Reserve's policy outlook. The Labour Department's report on producer price inflation for July is due later in the day and consumer price inflation on Wednesday. Both are expected to show a slowdown in the annual rate of price growth, which could provide further impetus for the Federal Reserve to lower rates in light of recent concerns about the outlook for the economy. The Fed is widely expected to cut interest rates next month, but analysts are divided regarding the probability of a quarter or half point rate cut. Thursday's retail sales numbers, comments from Fed officials and U.K. inflation data and GDP report due on Wednesday and Thursday, respectively may also influence sentiment as the week progresses. Germany's economic sentiment survey results are due later in the day. The ZEW economic confidence index is forecast to fall to 38.0 in August from 41.8 in the previous month. The U.K. unemployment data is due, with the jobless rate forecast to rise to 4.5 percent in the three months to June from 4.4 percent in the preceding period. Asian stocks were moving in a tight range, though Japan's Nikkei index surged nearly 3 percent as traders returned to their desks after a long holiday weekend. The yen was stable, providing support to exporters. Technology stocks including Tokyo Electron also traded higher after Nvidia Corp. boosted the Philadelphia Stock Exchange Semiconductor Index. Gold dipped ahead of the release of key U.S. inflation readings this week. Oil prices fell in Asian trading after climbing more than 3 percent in the previous session. Traders kept an eye on widening conflict in the Middle East, with the U.S. expecting Iran and its proxies to launch attacks against Israel as soon as this week. Overnight, U.S. stocks fluctuated before eventually ending mixed after last week's bumpy ride. The Dow shed 0.4 percent, while the S&P 500 inched up marginally and the tech-heavy Nasdaq Composite edged up 0.2 percent ahead of key economic reports due later in the week. European stocks also ended mixed on Monday, with upcoming U.S. and U.K. inflation data in focus. The pan European STOXX 600 closed flat with a negative bias. The German DAX finished marginally higher and the U.K.'s FTSE 100 added half a percent while France's CAC 40 slipped 0.3 percent.