European shares are expected to tread water on Wednesday in cautious trade ahead of the U.S. Federal Reserve's decision on interest rates and its policy statement at 1915 GMT, as higher rates often weigh on stocks by raising the cost of borrowing, but Swiss drugmaker Roche may slip after posting slightly disappointing results for 2004.
Other companies reporting include Britain's BSkyB, Italy's Enel and Sweden's Atlas Copco.
The dollar and treasury bonds were range-bound ahead of the U.S. interest rate decision. With a sixth-straight rise in rates a near certainty, investors will focus on any signs that the central bank could accelerate its campaign of measured monetary tightening in the coming months.
U.S. President George W. Bush's annual State of the Union address at 0200 GMT on Thursday will also be followed for any outline of steps to curb a large and growing budget deficit.
Crude prices hovered near $47 a barrel ahead of U.S. crude stockpile data due at 1530 GMT which will be watched carefully by investors and supplier alike as the focus shifts away from low winter fuel supplies towards healthier crude and gasoline inventories ahead of the second quarter, when demand hits a seasonal low.
Stocks may also be shaken by news that Germany's official jobless total rose above five million in January according to Economy Minister Wolfgang Clement said.