By Scott Kanowsky 

-- European stock markets largely held steady on Monday, as investors weighed the potential impact of another expected jumbo-sized Federal Reserve interest rate hike later this week.

By 04:45 AM EST (0845 GMT), the DAX in Germany traded 0.03% lower, the CAC 40 in France was up 0.03%, and the U.K.'s FTSE 100 was unchanged. The pan-European STOXX 600 hovered near the flatline at 425.68.

The European Central Bank claimed the spotlight last week, raising interest rates by a hefty 50 basis points on Thursday, its first increase in 11 years, and this week it is the turn of the Federal Reserve.

The U.S. central bank is widely expected to hike by at least 75 basis points with inflation remaining elevated. The FOMC statement and accompanying press conference by Fed Chair Jerome Powell will also be studied carefully as the market tries to gauge the possibility this aggressive tightening will plunge the world’s largest economy and major global growth driver into recession.

U.S. Treasury Secretary Janet Yellen said on Sunday that U.S. economic growth is slowing and she acknowledged the risk of a recession, but she said a downturn was not inevitable.

Meanwhile, the growth outlook darkened further in Europe on Monday, with the closely-watched German Ifo business climate index for July slumping by more than expected to 88.6.

Data released Friday also showed the Eurozone composite purchasing managers index slipped back into contraction territory for the first time since March 2021.

In corporate news, shares in Eutelsat Communications SA (EPA:ETL) dropped by more than 17% after the satellite operator said it is in merger talks with rival OneWeb.

Shares in Dutch medical equipment maker Koninklijke Philips NV (AS:PHG) also dropped by more than 10% after the company reported a bigger-than-expected drop in second-quarter core earnings to €216 million ($220 million), citing supply shortages and lockdowns in China.

Irish-listed shares in Ryanair Holdings PLC (IR:RYA) rose after Europe's largest airline by passenger numbers posted a post-tax profit of €170 million ($174 million) for the three months to the end of June - its first profit in the quarter in three years but well short of pre-COVID-19 profit levels.

Oil prices fell, continuing the recent selloff as traders fret that this week’s Fed meeting will see more monetary tightening, hitting global economic growth and thus crude demand.

Also weighing on oil was news of additional supply, as Libya’s National Oil Corporation stated over the weekend that it is aiming to bring back production to 1.2 million barrels per day in two weeks.

The OPEC member’s output has been severely hit by a power struggle between rival governments and chronic under-investment in infrastructure.

By 04:52 AM ET, U.S. crude futures traded 0.12% lower at $94.59 a barrel, while the Brent contract fell 0.16% to $98.22. Both contracts are lower for the fourth consecutive session.

Additionally, gold futures fell by 0.01% to $1,727.25, while EUR/USD traded 0.07% higher at 1.0217.