Europe open: Dax plays catch-up after holidays

European stocks were on the front foot on Tuesday as they returned from their long weekend break and played catch up after Monday's gains.

Germany's DAX was up 1.1% and France CAC up 1.03%, with Spain's Ibex and Italy's MIB both up 1.3%.

Traders were looking ahead to the region's trade balance figures, which are expected to edge up to a 10 month high of €23.1bn, as well as hopes for positive inflation date from the UK and US.

Oil prices continued their advance, with Brent crude up 0.62% to $49.28 per barrel and West Texas Intermediate 1.03% higher to $48.22 per barrel around 0900 BST.

UK inflation will be in focus at 0930 BST, with analysts expecting to see a slowdown further away from the Bank of England’s 2% target.

Economists expect the consumer price index eased to 0.3% month-on-month growth in April from 0.4% in March. On the year, CPI is estimated to remain at 0.5% increase.

Core inflation, which excludes volatile items such as fuel and food, is expected to slow to 1.4% year-on-year from 1.5%.

“Consumer price inflation is expected to have edged down in April as a consequence of an unwinding of significant price increases in March that were the consequence of the earlier Easter this year (in particular, air fares),” said Howard Archer, chief UK and European economist at IHS Global Insight.

“However, this is expected to have been partly countered by some upward pressure from increased petrol prices and also possibly a firming in food prices.”

US inflation is also due at 1330 BST. In contrast to the UK, CPI is expected to pick-up to 0.3% month-on-month growth in April from 0.1% in March. On a year-on-year basis CPI is forecast to rise 1.1% in April following a 0.9% increase a month earlier. The Federal Reserve is targeting 2% inflation and will be taking the data into consideration ahead of its next decision on interest rates in June.

Among corporate stocks, Vodafone shares gained after the company’s organic sales returned to growth and beat expectations in the full year after a strong performance in the fourth quarter, hiking the final dividend 2%.