A look at the day ahead from Dhara Ranasinghe.
If you were hoping that the day before a big U.S. public holiday would bring a semblance of calm, think again.
First, before Thursday's Thanksgiving holiday comes a slew of U.S. data -- weekly initial jobless claims, the second Q3 GDP print, personal income and personal spending numbers for October, new home sales, and preliminary readings for October durable goods orders.
The PCE index, a key inflation indicator, will be in focus given the recent surge in inflation to three-decade highs.
And not to forget minutes from the Fed's last meeting - the one where they announced tapering - are also on the calendar.
In Europe, Germany's closely watched Ifo business indicator may better illustrate the impact of resurgent COVID caseloads than Tuesday's upbeat PMI numbers.
All of this comes against the context of increasingly edgy world markets as investors position for higher inflation and interest rates.
Equity markets were particularly unnerved by a rise in real or inflation-adjusted yields in major economies.
German 10-year inflation linked bond yields jumped nine basis points to 3-week highs on Tuesday, surpassing a 7 basis-point rise in nominal borrowing costs. That came after hawkish comments on inflation by two ECB policymakers.
New Zealand's central bank meanwhile hiked interest rates for the second straight month on Wednesday to keep surging consumer prices in check.
Still, European stock futures are higher this morning. On Wall Street, where higher Treasury yields sent the tech-heavy Nasdaq down for two straight days, futures are flatlining.
And don't forget Turkey where the lira is headed back towards record lows hit during Tuesday's 15% crash.
With President Tayyip Erdogan defending recent rate cuts, the lira, is trading around 13 per dollar, down 22% since the beginning of last week. Contagion appears limited, but investors are watching closely.
Key developments that should provide more direction to markets on Wednesday:
- Major Toshiba (OTC:TOSYY) shareholder objects to break-up, urges board to solicit offers
- Japan's factory activity grows at fastest pace in nearly four years
- ECB speakers: ECB board member Isabel Schnabel
- Treasury 20-year bond auction Lira underperforms EM peers, https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgdeobpb/Lira%20underperforms.png