Europe midday: Shares in cautious mood ahead of Fed rate call

(Sharecast News) - European shares were lower at the open on Tuesday amid a dearth of major corporate or economic news to drive sentiment.

The pan-regional Stoxx 600 index was down 0.24% to 555 at 1213 BST with major continental bourses following suit. Eyes are still firmly on interest rate decisions from the US Federal Reserve and Bank of England.

"In Washington, political manoeuvring around the Federal Reserve has intensified ahead of Wednesday's pivotal decision. The Senate confirmed Trump adviser James Miran as Fed governor, ensuring the former president has a voice inside the central bank as it weighs easing," said Rostro analyst Joshua Mahony.

"Who would be surprised to see Miran vote for an oversized 50bp cut to justify his appointment? At the same time, an appeals court has cleared Lisa Cook to remain on the Board, marking yet another failed attempt from Trump to reshape the FOMC towards his political agenda."

"With markets overwhelmingly positioned for a cut, the dollar has fallen to a two-month low, reflecting an optimism that we are set to embark upon a new phase of dramatic monetary easing thanks in no small part to recent jobs market weakness."

Traders were also assessing US President Donald Trump's claim that tariff talks with China had made progress. The news sent the S&P500 and Nasdaq indices to record highs.

On the economics front, industrial production across the eurozone rose slightly less than expected in July, only partially offsetting the previous month's decline, according figures out on Tuesday from Eurostat.

Seasonally adjusted industrial production for the single-currency region increased by just 0.3% in July, following a revised 0.6% drop in June. This was slightly under the consensus forecast for a gain of 0.4%.

In the UK, the unemployment rate was unchanged in July, official data showed on Tuesday, in line with expectations, while wage growth cooled.

According to the Office for National Statistics, the rate was estimated to be 4.7% in May to July. The employment rate was 75.2%.

The number of payrolled employees softened, however, by 142,000 year-on-year in July, and by 6,000 month-on-month.

Earnings, meanwhile, ticked lower. Annual growth in employees' average earnings, excluding bonuses, was 4.8%, down slightly on June's 5% although it was in line with expectations.

In equity news, shares in recruitment companies were lower after SThree lowered profit forecasts to well below expectations, sparking a 21% slump in the stock price and hitting rivals Hays, Randstad and Adecco.

Reporting by Frank Prenesti for Sharecast.com