Investors are analysing mixed Chinese activity ahead of the publication of important inflation data on both sides of the Atlantic.

Investors are analysing mixed Chinese activity ahead of the publication of important inflation data on both sides of the Atlantic, and European stock markets begin Friday with little change.

As the week, month, and first quarter draw to an end, European stocks are expected to trade cautiously as investors seek clarification on the extent of the rebound in China following the easing of its COVID-19 restrictions as well as the prognosis for interest rates in the U.S. and Europe.

The U.K. economy increased 0.1% in the quarter in the last three months of last year, which was somewhat better than predicted, according to figures released earlier today. In contrast, German retail sales disappointed, declining 1.3% in the month of February.

The focus will be on the figures on inflation in the Eurozone later in the day. The annual CPI is predicted to have increased by 7.1% in March, down from the 8.5% gain in February.

Yet, based on the stronger-than-expected German data released on Thursday, there may be a silver lining to this number.

A strong inflation report is expected to confirm markets' expectations that the European Central Bank will raise interest rates by another 50 basis points this year.

The core PCE price index, the Fed's preferred inflation indicator, is scheduled to be released later in the afternoon.

This might offer hints as to the Federal Reserve's next interest rate increase, with the decision-makers possibly needing to proceed cautiously as the impacts of shaky bank confidence ripple through the economy.

While traders analysed the mixed activity data from China, the world's largest crude importer, ahead of the publication of the U.S. inflation report, oil prices moved in a sluggish manner on Friday.

This year, along with the pace of the Federal Reserve's interest rate hike cycle and its effects on U.S. economic activity, expectations for China's economic rebound and the resulting increase in crude demand have become a crucial factor in setting oil prices.

Key Events Today:

• German Unemployment Change at 08:55 GMT.
• Eurozone CPI at 10:00 GMT.
• US Core PCE 13:30 GMT.

(Investing.com, Reuters.com)