European stocks are expected to open flat on Wednesday as data showed the Chinese growth story remained on track and with investors digesting news that Ireland's rating was cut to junk.
The FTSE is expected to open flat, Germany’s DAX is predicted to be down by just one point and the CAC 40 in France is called 9 points lower.
China's economy grew by 9.5 percent versus an expectation of 9.4 percent in the second quarter, as both factory output and retail sales beat forecasts.
Investors are likely to remain firmly focused on the euro zone debt crisis following Moody’s decision to downgrade Irish debt to junk status and warning the country is likely need another bailout from the European Union and the International Monetary Fund.
Following fears over contagion to Italy and Spain earlier this week, there are reports that EU heads of state will meet on Friday to discuss what to do next on Greece and how best to stop the problems in the periphery spreading to larger members of the euro zone.
The meeting will come on the same day that the European Banking Authority releases stress test results for 91 European banks.
Federal Reserve Chairman Ben Bernanke gives a bi-annual testimony on the health of the US economy on Capitol Hill at 15:00 London time.
Minutes from the Fed's last meeting released last night showed some members of the FOMC considered the need for further monetary stimulus due to weak US data; any comments today on the prospect of the third round of quantitative easing will be closely watched by the market.
In London the UK Prime Minister David Cameron can expect a rough ride in the House of Commons as the News of the World Scandal continues to dominate the press in the UK.
On Tuesday, parliament urged Rupert Murdoch to drop his bid to take full control of BSkyB . The motion is not binding.
French cosmetics group L'Oreal missed forecasts with second-quarter sales due to problems in Eastern Europe.