Europe open: Central banks in focus

A test launch of a ballistic missile by North Korea is dampening sentiment at the start of trading, with investors otherwise focused on a speech from a top European Central Bank official later in the day which may help shed light on the institution's policy stance.

As of 0810 BST, the benchmark Stoxx 600 was down by 0.38% or 1.4 points to 381.89, alongside a dip of 0.34% in Germany's Dax to 12,428.72 while the Cac-40 was slipping 0.50% to 5,170.07.

ECB chief economist Peter Praet was scheduled to participate in a panel discussion at The Fixed Income Market Colloquium in Rome, at 1230 BST.

According to analysts at Unicredit, the ECB likely felt markets had overreacted to a recent speech from its chief, Mario Draghi. So Praet might have a chance to rectify that, they said.

On a related note, on Tuesday morning rate-setters in Sweden chose to keep their main policy rate unchanged at -0.50%.

However, unlike policymakers at various of the world's largest central banks, they believed a continued expansive monetary policy was needed in order for inflation to stabilise at roughly 2%.

"The risk of setbacks has declined, although there is still economic and political uncertainty in many parts of the world. Global inflationary pressures are still subdued and monetary policy abroad is expansionary," they said.

French prime minister Edouard Philippe was also set to deliver a speech to lawmakers, which was expected to include details about the next budget.

Acting as a backdrop, overnight the North Korean regime launched an intermediate-range ballistic missile into Japan's exclusive economic zone, trigerring an immediate condemnation of South Korea, Japanese and US officials.

Still on the economic calendar for Tuesday, Eurostat was set to publish its May data on factory gate inflation in the euro area at 1000 BST, with Irish unemployment figures for June scheduled for release at 1100 BST.

US private equity outfits Bain Capital and Cinven may seek regulatory approval to launch a new takeover offer for the drugmaker.

Shares in the main German carmakers were all lower after they reported their latest monthly sales figures the day before.