European stocks are expected to make small gains at the open on Wednesday on hopes that Federal Reserve chairman Ben Bernanke will on Friday signal further support for the ailing US economy.
Bernanke will speak at the Fed’s Jackson Hole conference on Friday but some analysts fear the Fed chairman will not give a clear signal on another round of quantitative easing.
Asian stocks had gained overnight but fell back as the session progressed as investors digested news that Moody’s has downgraded Japanese debt by one notch due to the scale of Japan’s debt and the pace at which it has grown since 2009.
Oil is trading slightly higher after Libyan rebels overran Muammar Gaddafi's head quarters in Tripoli and claimed the dictator is finished.
Gaddafi has fled the scene and the rebels say his rule is now over. The message from Gaddafi is that his withdrawal was tactical following heavy bombing by NATO aircraft.
In Europe, German Chancellor Angela Merkel last night called demands for the launch of euro bonds "grossly negligent" whilst refusing to back Finland’s demands for a bilateral collateral deal with Greece.
"It can't be that one country gets extra collateral," Merkel was reported to have told lawmakers in Berlin.
Italy’s largest trade union has called for an 8 hour general strike on September 6 in protest over the latest round of austerity measures.
The Italian government says the strike is "unjustifiable, irresponsible".
Before the market opens we get earnings from advertising giant WPP, Mining group BHP Billiton and beer maker Heineken.
The CEOs of Heineken and WPP will join CNBC’s Squawk Box before the market open.