European shares were subdued on Tuesday as investors paused for breath after recent volatility on concerns about the U.S. interest rate outlook.

Amid renewed uncertainty around inflation and the stimulus outlook, investors await a speech from Fed Chair Jerome Powell later in the day and a Bank of England policy decision on Thursday for directional cues.

In his prepared remarks for hearing before Congress, Fed Chair Jerome Powell said that the current surge in inflation is likely to be transitory and it could move back to the Fed’s 2 percent target when supply imbalances are resolved.

The U.S. dollar strengthened against its major rivals amid speculation that the tightening of the monetary policy by the Federal Reserve will be gradual.

Meanwhile, analysts expect no changes to policy on Thursday when the Bank of England reviews its policy.

The pan European Stoxx 600 was marginally lower at 454.81 after ending 0.7 percent higher on Monday.

The German DAX slid 0.2 percent and France’s CAC 40 index was marginally lower while the U.K.’s FTSE 100 rose 0.3 percent in cautious trade.

German medical and safety technology provider Draegerwerk AG & Co. KGaA jumped 3.7 percent after increasing its guidance for fiscal year 2021.

Shares of Kingspan Group surged 4.6 percent in London after the provider of high performance insulation and building envelope solutions said it expects first-half sales and trading profit ahead of last year as well as the first half of 2019.

Aston Martin Lagonda Global Holdings declined 1.5 percent. The luxury vehicles company said it has commenced legal proceedings against a Swiss dealership network over alleged failures to hand over customer deposits.

Public transport company National Express Group advanced 1.8 percent. The company has announced the acquisition of Transportes Rober in Spain for headline consideration of 13 million euros.

French insurer Axa dipped slightly after announcing it is selling its insurance businesses in Malaysia to Italian rival Generali for about 140 million euros ($167 million).

Sanofi fell about 1 percent. The company and its U.S. partner Translate Bio had started a Phase I clinical trial evaluating an mRNA-based investigational vaccine against seasonal influenza.

In economic releases, the U.K. budget deficit narrowed in May from the last year, data from the Office for National Statistics showed.

Public sector net borrowing decreased to GBP 24.33 billion in May from GBP 43.76 billion in the previous year. The deficit was also below the economists’ forecast of GBP 26.1 billion.

Nonetheless, this was the second highest May borrowing since records began in 1993.

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