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European Shares Seen Opening Flat After Strong Rally

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European stocks may open flat to slightly lower on Wednesday after strong gains in the previous session following encouraging news on trade and interest rates.

All eyes are now upon the U.S. Federal Reserve, which is scheduled to release its policy statement later today, followed by a press conference by Chairman Jerome Powell shortly after.

With trade tensions threatening global growth, it is expected that the U.S. central bank would follow the lead of the European Central Bank and open the door to future rate cuts.

The Bank of Japan (BoJ) and the Bank of England (BoE) will also announce their policy verdicts on Thursday.

In a speech before Japanese parliament on Tuesday, BOJ Governor Haruhiko Kuroda said the central bank would consider a further cut to borrowing costs into negative territory.

The Bank of England is likely to keep policy on hold, given continued Brexit uncertainty.

The contest to be Britain's next prime minister shrank to five candidates on Tuesday after Boris Johnson, the New York-born former mayor of London, stormed ahead with 126 votes in the second round of voting by Conservative Party legislators.

Asian markets remain broadly higher after a surge on Wall Street overnight drove the major indexes to within striking distance of their all-time highs.

Gold inched higher as the U.S. dollar held near a two-week high. U.S. crude prices extended gains in Asian trading after climbing as much as 3.8 percent on Tuesday amid optimism that a deal between the world's two largest economies will significantly boost global growth and result in increased energy demand.

U.S. stocks rose sharply overnight on optimism that an upcoming G-20 meeting between Trump and Xi would lay the groundwork for a possible deal.

Sentiment was bolstered after President Donald Trump tweeted that he had a "very good" telephone conversation with the Chinese President and will have an "extended meeting" at the G20 summit next week.

"Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting," Trump tweeted.

The Dow and the tech-heavy Nasdaq Composite surged around 1.4 percent while the S&P 500 advanced 1 percent.

European markets hit a one-month high on Tuesday after ECB President Mario Draghi suggested the bank will announce more stimulus through rate cuts or asset purchases - if inflation doesn't pick up.

The pan European Stoxx 600 soared 1.7 percent. The German DAX jumped 2 percent, France's CAC 40 index rallied 2.2 percent and the U.K.'s FTSE 100 climbed 1.2 percent.

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