European stocks are set to open higher Tuesday as investors return to risk markets following solid U.S. data and a modest overnight rebound for the dollar ahead of the Federal Reserve's two-day rate setting meeting. 

Britain's FTSE 100 is likely to add 0.5% at the start of trading, according to financial bookmakers IG, with higher oil and commodity prices offsetting the impact of an elevated pound, which traded at 1.3026 at the start of European trading. Broader European markets are also expected to post solid gains ahead of a key survey of business sentiment from Germany's Ifo Institute later in the session.

Overnight in Asia, the dollar index posted modest gains after a better-than-expected reading of both the manufacturing and services sectors in the world's biggest economy before drifting into a 0.05% loss from Monday's close to change hands at 93.92.

The MSIC Asia ex-Japan index, the region's broadest measure of share prices, edged 0.06% higher into the start of European trading while Japan's Nikkei 225 slipped 0.03% into the close of trading

Last night's record close for the Nasdaq, the 41st of the year, kept tech investors in a bullish mood, while Google parent Alphabet's solid, but not spectacular, second quarter earnings report kept markets from tipping into the red in overnight trading.

Global oil prices were also extending gains after an informal meeting of OPEC members agree to eventually set caps on the output levels of Libya and Nigeria, both of which are currently exempt from the cartel's agreed production cuts, and Saudi Arabia, the world's biggest producer, said it would limit exports to its customers in August.

West Texas Intermediate crude futures for September delivery were marked 0.56% higher at $46.60 while Brent contracts for the same month, the global benchmark, were seen 0.5% higher at 48.85.

Wall Street looks set for a mixed open according to early U.S. equity futures, with higher oil prices helping the Dow Jones Industrial Average into a small 0.05% gain while the broader S&P 500 and the Nasdaq drift into modest losses.

However, another heavy earnings slate that includes second quarter figures from Dow components Caterpillar (CAT - Get Report) ,  Du Pont (DDD - Get Report) and 3M Co. (MMM - Get Report) as well as Eli Lilly & Co. (LLY - Get Report) , Kimberly-Clark Corp.  (KMB - Get Report) and McDonald's Corp. (MCD - Get Report) has the potential to significantly alter the tone of the session.

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