European Shares Set For Cautious Start After Rally

European stocks may open largely unchanged on Tuesday after sharp gains the previous day.

Asian markets nudged higher as signs that policymakers were willing to do more to boost growth helped improve investors' appetite for risk.

Finnish central bank governor Olli Rehn said on Monday that the European Central Bank (ECB) is determined to act if the medium-term inflation outlook continues to fall short of the ECB's aim.

The focus now shifts to the minutes of the U.S. Federal Reserve's last meeting due out on Wednesday as well as Fed Chair Jerome Powell's speech at the Jackson Hole symposium on Friday as investors look for clues to what the U.S. central bank may do next.

The Group of Seven (G7) leaders' summit will be held this weekend in France and it remains to be seen whether there will be a joint communique amid wide gaps between member nations on trade and climate issues.

Meanwhile, top White House officials denied media reports suggesting that the Trump administration is discussing a temporary payroll tax cut to stem an economic downturn.

The U.S. dollar held near a three-week high as talk of global stimulus helped lift
U.S. government bond yields.

Yields on benchmark U.S. Treasuries pulled away from three-year lows as China lowered its new lending reference rate slightly and the German finance minister suggested the government would aim to muster €50 billion of extra spending in case of an economic crisis.

Gold prices held steady after posting their biggest daily decline in a month in the previous session to fall below a key psychological level of $1,500 an ounce.

Oil prices slipped in Asian deals after rising sharply overnight amid signs that the Trump administration was trying to dial back its rhetoric with China.

Overnight, U.S. stocks rose sharply as the Trump administration downplayed concerns of a possible recession and once again delayed restrictions on Chinese tech giant Huawei for another 90 days.

The Dow Jones Industrial Average surged 1 percent, the tech-heavy Nasdaq Composite rallied 1.4 percent and the S&P 500 advanced 1.2 percent.

European markets ended with strong gains on Monday as investors cheered news of stimulus efforts in China and Germany aimed at boosting economic growth.

The pan European Stoxx 600 gained 1.1 percent. The German DAX and France's CAC 40 index both climbed around 1.3 percent while the U.K.'s FTSE 100 index added 1 percent.