A look at the day ahead from Tommy Wilkes.
The Bank of Korea became the latest central bank to start the shift away from pandemic-era stimulus on Thursday after raising interest rates for the first time in almost three years. Policymakers said the economy was overheating and in a notably hawkish tone warned that they could tighten again.
While the Korean economy is running particularly strong, the hike in rates serves as another reminder for investors that the dialling back of extraordinary loose monetary policy is beginning in earnest. The hike comes as the Federal Reserve begins its annual Jackson Hole symposium.
Emerging market stocks fell after the announcement, as did markets across Asia -- with a rapid rise in cases of the Delta COVID-19 variant also hitting sentiment.
After climbing to record highs on Wednesday, the mood on global stock markets looked a little more cautious with European and Wall Street futures in the red. Many investors are reluctant to place big bets ahead of the 3-day virtual conference.
No one is expecting the Fed to sound the gun on tapering its asset purchases at the symposium, but investors will be listening closely for Chair Jerome Powell's views on Friday on when to dial back the stimulus as the economy recovers all its lost output from the pandemic and inflation rises.
Elsewhere, the dollar was little changed and stood at one-week lows. The safe-haven greenback had been catapulted to a multi-month high last week on nerves about the global economy.
Oil prices dipped after three days of gains, although the Brent crude price was firmly above $72 a barrel.
In company news, shares in German fund manager DWS fell 5.3% in early Frankfurt trade following a news report that U.S. authorities are investigating the manager over its sustainability claims.
Australia's biggest supermarket chain Woolworths announced a A$2 billion ($1.45 billion) share buyback and a 20% jump in annual profit as lockdowns sparked demand for household essentials.
Key developments that should provide more direction to markets on Thursday:
-Italy industrial orders data Jun
-Euro zone M3 money supply Jul
-U.S. Q2 GDP, second estimate
-U.S. PCE Q2
-U.S. weekly jobless claims
-Jackson Hole Symposium until Aug 28
-ECB July policy meeting minutes
-Earnings: CD Projetkt, Delivery Hero, Hays, Polymetal