European stocks may open flat to slightly higher on Wednesday after U.S. President Donald Trump told reporters the U.S.-China trade talks are "going very well" and added that an early March deadline to reach a deal could be postponed.
Trump claimed China is "trying to move fast" so that an increase in tariffs on Chinese goods currently set to take effect does not happen.
The higher-level talks with Chinese Vice Premier Liu are planned later this week while a Xi-Trump meeting is likely next month to strike a deal or secure a memorandum of understanding.
The Bloomberg reported on Tuesday that the U.S. would try to secure a pledge from China that it will not attempt to depreciate the yuan as part of a trade deal.
Investors also await the minutes of the Federal Reserve's January policy meeting for clues on policymakers' thinking on interest rates and its balance sheet reduction policy.
New York Fed President John Williams on Tuesday said that he sees no need to raise interest rates again unless growth or inflation surprise to the upside.
Gold held near 10-month highs while the dollar eased on optimism for a breakthrough in the U.S.-China trade talks.
The British pound struggled for direction after climbing the previous day on rising hopes that Prime Minister Theresa May will make progress in seeking changes to her Brexit deal with the European Union.
Asian stocks are trading mixed while oil prices held near three-month highs on tightening supplies.
Overnight, U.S. stocks finished slightly higher, with strong Walmart earnings, positive housing data and continued optimism over U.S.-China trade talks helping underpin investor sentiment as traders returned to their desks after a long holiday weekend.
The Dow inched up marginally while the tech-heavy Nasdaq Composite and the S&P 500 rose around 0.2 percent.
European markets fell broadly on Tuesday after China accused the United States of fueling cybersecurity fears, thus risking exacerbating tensions between the two countries.
Weak earnings updates from the likes of Danone, HSBC and BHP also weighed on markets.
The pan European Stoxx 600 slipped 0.2 percent. The German DAX inched up 0.1 percent, while France's CAC 40 index dropped 0.2 percent and the U.K.'s FTSE 100 shed 0.6 percent.