By Scott Kanowsky 

-- European shares were broadly steady in early dealmaking on Tuesday, as investors mulled over the path forward for Federal Reserve monetary policy and looked ahead to fresh economic data out of Europe.

At 03:20 ET (08:20 GMT), the pan-European increased 0.04%, the in Germany traded 0.09% higher, and the in France rose by 0.19%. The in the U.K. was an outlier, falling 0.47%.

The moves come after U.S. equities rallied in the prior session, with optimism growing that the Fed will slow its recent cycle of monetary tightening when policymakers meet next week. Some officials at the U.S. central bank, including Fed governor Christopher Waller, have backed a smaller 25-basis point rate hike despite lingering concerns over how long it will take for inflation in the world's largest economy to fall back to the Fed's 2% target.

Asian stocks also added on to their recent rise, although trading remained thin with China and much of the region still closed for Lunar New Year celebrations.

Investors will have a chance to gauge the health of the Eurozone economy when preliminary data from the currency area comes out later in the morning. Economists predict that a contraction in business activity in the region will have eased slightly in January.

Meanwhile, in Germany is on course to improve for a fourth straight month in February, according to a new survey from GfK institute, thanks mainly to a dip in energy prices.

In corporate news, timepiece maker Swatch Group (SIX:) said it was hopeful about a recovery in its key Chinese market as the country reopens after the removal of long-standing COVID-19 restrictions, leading to a rally in the company's shares.

Associated British Foods PLC (LON:) shares dipped despite the retail group posting better-than-expected group in the 16 weeks to January 7. Analysts at RBC Capital Markets suggested that margins at its key Primark unit will likely be hit by currency and inflation pressures.

(LON:), the insurance and travel specialist focused on customers over 50, reported underlying pre-tax earnings in line with guidance during the August to January period following strong performance at its cruise business, providing a lift to shares.

Elsewhere, futures traded 0.15% lower at $81.50 a barrel, while the contract decreased by 0.31% to $87.92 by 03:20 ET, with one of the major themes in the market being a search for signals of a rebound in Chinese demand.

Additionally, inched up 0.59% to $1,939.90/oz, while moved up 0.19% to 1.0889.