Marketmind: Weapons of war

But then, it is also the day before Europe learns how much gas from Russia might find its way to the continent via the Nord Stream 1 pipeline which is scheduled to reopen from a 10-day maintenance shutdown.

Russian President Vladimir Putin has already warned of a further reduction in capacity, which had been cut to 40% even before the pipeline shut.

If Russian gas supplies, currently the single biggest determinant for Europes economic outlook, were to seize up, economic activity could tumble by more than 6% in some countries the International Monetary Fund warned.

A deal on grains – the other weapon in the economic war between Russia and the West – has also been elusive. And the White House warned that Moscow is laying the groundwork for annexing Ukrainian territory.

All that makes a challenging backdrop for the European Central Banks Thursday meeting, which is expected to up interest rates for the first time in over a decade and may in fact see rates rise by 50 basis points, rather than the 25 the bank had originally flagged.

Central bankers elsewhere face conundrums too. China chose to kept lending rates on loans unchanged, possibly as aggressive rate rises elsewhere make it cautious on loosening policy,.

Finally, UK data shows inflation at a new 40-year high well above 9%. The cost of living crisis rumbles on unabated.

Key developments that should provide more direction to markets on Wednesday:

Economic Events:

German June producer inflation rises 32.7% y/y

Euro zone May current account/ July flash consumer confidence

South Africa June CPI

Canada June CPI

U.S. June existing home sales

U.S. Earnings: Nasdaq Stock Market, Biogen Idec, Abbott , Northern Trust, Tesla Motors, ALCOA, United Continental, Crown Holdings

EU Earnings: ASML Holding, Volvo, ASM International