A look at the day ahead in European and global markets from Ankur Banerjee

It was a risk-on session in Asia, with European bourses poised for a similar start in the wake of comments by Fed Chair Powell, with investors buoyed by reinforced expectations that rate cuts are just around the corner in the U.S.

The fallout of the French election will remain in the spotlight as opponents of France's National Rally stepped up their bid to block the far-right party from power in Sunday's run-off election.

The euro, which lurched to a two-week high on Monday after RN did not score an outright majority, was steady at $1.074475, while futures indicated the pan-European STOXX 600 index could move away from the two-month low it touched on Tuesday.

Powell stating that the U.S. is back on a "disinflationary path" was enough to put the dollar on the defensive, with Treasury yields lower even though he cautioned that more data is needed before policymakers could consider cutting rates.

""We just want to understand that the levels that we're seeing are a true reading on what is actually happening with underlying inflation," Powell said at a conference in Portugal sponsored by the European Central Bank.

So, the Fed is still data-dependent, making the next few inflation readings crucial in dictating where U.S. rates are headed by the end of the year. Traders are clinging to as much as two rate cuts this year from the Fed.

Minutes from the Fed's June meeting are due later in the day and could offer clues on the central bank's thinking on U.S. rates.

Meanwhile, the ECB remains in no hurry to lower borrowing costs further after cutting rates last month, with data on Tuesday showing the crucial services component in euro zone inflation staying stubbornly high.

The ECB's Christine Lagarde and Philip Lane are due to take the stage in Portugal and may have comments that could swing the markets on rate expectations. Traders are currently pricing in 43 basis points of cuts this year from the ECB.

In corporate news, Tesla (NASDAQ:TSLA) reported on Tuesday a smaller-than-expected 5% drop in vehicle deliveries in the second quarter, as the electric car maker's price cuts and incentives helped mitigate cooling demand. Although EV makers, not just Tesla, still face a bumpy road ahead.

Key developments that could influence markets on Wednesday:

Economic events: June PMI for France, German, UK and euro zone

Speakers: Fed's John Williams, ECB's Christine Lagarde and Philip Lane at ECB forum in Portugal

(By Ankur Banerjee in Singapore; Editing by Muralikumar Anantharaman)