European stock markets are likely to begin flat Tuesday, ahead of the commencement of the critical Fed policy meeting.

European stock markets are likely to begin flat Tuesday, ahead of the commencement of the critical Fed policy meeting, as well as the announcement of the latest Eurozone inflation and earnings from banking behemoth HSBC.

Equity markets are anticipated to trade cautiously as Fed officials begin their policy meeting later Tuesday, with a statement on interest rates and a following press conference scheduled for Wednesday.

The Federal Reserve of the United States is largely expected to announce a quarter-point hike in interest rates, followed by a pause while it evaluates its year-long tightening campaign.

Inflation, nevertheless, remains a concern in the United States and throughout the world, causing the Reserve Bank of Australia to deceive markets earlier Tuesday with a quarter-point rate hike when most expected it to remain unchanged.

Going back to Europe, preliminary eurozone inflation data for April is due later in the session, and it is expected to remain raised, giving the ECB yet another reason to raise interest rates on Thursday.

The Eurozone CPI is expected to grow 0.9% month on month and 7.0% year on year in April, while the core number, which includes volatile food and energy costs, is expected to rise 1.1% month on month and 5.7% year on year.

Tuesday's corporate spotlight will be on HSBC, Europe's largest bank by asset size. The lender's quarterly earnings tripled as global interest rates increased its profits and enabled it to issue its first quarterly dividend since 2019.

BP's quarterly results are also planned, with strong results projected to result in the FTSE 100 outperforming due to the weighting of these two firms in the U.K.'s benchmark index.

(investing.com, reuters.com)