Wednesday preview: FOMC minutes, Lloyds house price index in focus.

Source: Sharecast

In the UK, a quarterly update release from Shell will be in focus.

Investors will also turn their attention to German industrial production figures for August, the Lloyds house price index for September and the latest minutes from the Federal Open Market Committee.

Kathleen Brooks, research director at XTB, said: "Rate hike bets have been scaled back since the weaker payrolls data and the core PCE data for August. Although we expect the minutes to show that FOMC members are worried about the outlook for inflation, recent economic data suggests that the Fed has time to hold on and wait for further evidence that new price pressures are building before raising rates again.

"Added to this, the minutes could show that some Fed members are concerned about the fast pace of rate hikes. Last week, two Fed members, Williams and Jefferson, said that they saw no need to hike rates. This took the edge off the sharp rise in Treasury yields, although the 10-year continued to remain at elevated levels.

"The market is likely to look through this week’s minutes, especially as the subsequent data suggests inflation pressure may be easing. However, if the minutes do suggest that Williams and Jefferson are not the only dovish voices at the Fed then we could see US Treasury yields retreat further and the dollar come under pressure."