LONDON – World shares held just under record highs while European indexes edged lower on Tuesday, as investors focused on earnings and the Federal Reserve’s two-day meeting which ends on Wednesday.

Wall Street hit new highs on Monday, during the Asian session sentiment became more mixed.

A debt exchange from one of the country’s top homebuilders triggered a flurry of credit warnings.

At 0905 GMT, the MSCI world equity index, which tracks shares in 50 countries, was down 0.1 percent, having come close to but not surpassed the all-time highs reached in September.

European indexes were mostly in the red, with the STOXX 600 down 0.2 percent, having been knocked off the previous session’s all-time high.

Matthias Scheiber, global head of portfolio management at Allspring Global Investments, said he expected European and US shares to pick up during the session as more company earnings are released.

The Reserve Bank of Australia took a major step towards unwinding its pandemic-induced stimulus measures by dropping its target for bond yields and said that a rate move in 2023 was now possible given that inflation had risen more quickly than forecasted. But it also pushed back against hawkish market expectations.

Short-dated Australian government bond yields fell and the Australian dollar was down 0.7 percent at $0.74695 at 0912 GMT.

The Kiwi dollar was also down. The US dollar index was steady at 93.938.

“Our view is still that similar to other major developed banks, like the Federal Reserve or the ECB, to a certain extent (the RBA) will be willing to look through those short-term high inflation numbers,” Allspring’s Matthias Scheiber said.

Fed policymakers are expected to approve plans for scaling back their current $120 billion in monthly bond purchases that would phase them out completely by the middle of next year – a first step away from the core policies put in place in early 2021 to battle the economic fallout from the pandemic.

On Monday, Goldman Sachs brought its forecast for the first post-pandemic US interest rate hike forward by a year to July 2022, as the investment bank expects inflation to remain elevated.

The US 10-year Treasury yield was lower on the day, at 1.5523 percent.

European government bond yields also fell, pausing from the selloff which was sparked by the European Central Bank last week disappointing expectations of a firm push back against aggressive market pricing for rate hikes.

Meanwhile, oil prices rose close to multi-year highs.