By Peter Nurse

Investing.com - European stock markets are expected to open largely unchanged Tuesday, amid caution ahead of the latest European consumer inflation data leading into a key meeting of the European Central Bank later in the week.

At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France traded largely flat, and the FTSE 100 futures contract in the U.K. rose 0.1%.

The European Central Bank is widely expected to deliver its first interest-rate hike since 2011 later this week, with policymakers having basically committed to a quarter-point hike at the last meeting in June.

With this in mind, investors are already focussing on what September will bring, and whether a larger rate hike flagged last month as a possibility is still on the cards, especially as the growth outlook has deteriorated in recent weeks on growing fears about gas supplies to Europe.

The final reading of the June Eurozone CPI is due later in the session, and is expected to confirm inflation running at a record high of 8.6% on the year, up 0.8% on the month.

Ahead of that, U.K. labor data showed the country's unemployment rate remained unchanged at 3.8% in May, while the June claimant count fell by 20,000.

Investors are still waiting cautiously to see whether Russia resumes the flow of gas through the Nord Stream 1 pipeline on July 21, while Italian political uncertainty continues with Prime Minister Mario Draghi set to address lawmakers on July 20, when he’ll declare his intention to either give his fractious coalition another try or quit the government.

In corporate news, Telenor (OL:TEL) will be in focus after the Norwegian telecoms operator reported second-quarter earnings slightly above forecasts and reiterated its outlook, while Swedbank (ST:SWEDa) reported a rise in net earnings for the second quarter, helped by rising income from mortgages on the back of higher interest rates.

French train maker Alstom (EPA:ALSO) reported an 8% rise in first-quarter revenue, fuelled by sales in Europe where it also secured contract wins over the quarter.

Oil prices retreated Tuesday, handing back some of the previous session’s sharp gains as a handful of COVID-19 infections forced the northern Chinese port city of Tianjin to lock down a number of venues, the latest big city to fight the virus.

Nomura analysts said in a note on Monday that an estimated 264.1 million people in 41 cities in China, the world’s largest importer of crude, are affected by full or partial lockdowns or other control measures, up from 247.5 million in 31 cities last week.