European stocks set for higher open as traders monitor global market moves

LONDON — European stocks are expected to open higher on Wednesday as investors monitor global market developments.

The U.K.'s FTSE index is seen opening 0.2% higher, Germany's DAX up 0.3%, France's CAC 40 up 0.4% and Italy's FTSE MIB up 0.3%, according to data from IG.

U.K. inflation data for January will be published at 7 a.m. London time, with the consumer price index expected to have cooled to 3%, down from 3.4% a month ago.

The data will be closely watched by the Bank of England as it considers when to next trim interest rates. Sterling dipped and British government bond yields fell during Tuesday's trading session after data showed the U.K.'s unemployment rate rose to a five-year high, while wage growth slowed.

Earnings on Wednesday come from Glencore, BAE Systems, Orange and Euronext. 

Asian stocks pushed higher overnight in holiday-thinned trade with markets in mainland China, Hong Kong, Singapore, Taiwan and South Korea among those closed for Lunar New Year holidays.

U.S. stock futures were near the flatline in overnight trading after a tepid session on Tuesday. Traders on Wednesday will be watching for the Federal Reserve minutes from the policymakers' January meeting.

The next big catalyst this week, however, will likely be the personal consumption expenditures price index reading that's due on Friday. The PCE, the Fed's preferred inflation gauge, will give further insight into the state of the economy.

— CNBC's Pia Singh contributed to this market report.