European stocks are expected to fall at the open ahead of a vote in Berlin on whether to hand new powers to the European Financial Stability Fund.
Equities in Asia are mixed following a 2 percent loss for the S&P 500 on Wall Street as hopes of a speedy resolution to the euro zone debt crisis faded. Stocks had made big gains in Europe on Monday and Tuesday as reports indicated policy makers where preparing to significantly boost the funds available to the EFSF to support the euro zone bond market.
A European Union markets watchdog on Wednesday extended bans on short-selling stocks in France, Italy and Spain. The three countries introduced the bans on Aug. 12 as they tried to curb wild swings in stock markets.
In volatile trading on Wednesday commodities like copper and gold saw big losses with the precious metal now $300 off its recent highs.
Angela Merkel is expecting to win a vote on expanding the EFSF although some members of her own coalition could vote against the bill they consider is akin to throwing good money after bad. The outcome of the vote is expected by 13:00 CET in Berlin and CNBC's Silvia Wadhwa will be live from inside the German parliament all day with analysis.
As markets watch events in Berlin, EU and IMF inspectors are expected to return to Athens to meet with Greek officials and decide whether to hand over a 6th tranche of aid. Greece is pledging new austerity measures to convince Troika officials to release the badly-needed funds.
In Madrid, the Spanish government’s attempts to raise funds have been damaged after the opposition politicians forced officials to pull out of a proposed IPO of the Spanish National Lottery. The partial sale of the lottery was expected to raise up to 9 billion euros.
In the bond market investors will be watching Italy which is expected to sell 5 and 10 year notes worth between 5.5 billion euros and 9 billion euros.
The Financial Times is reportingthe SEC is probing RBS and Credit Suisse for their handling of problem loans. The FT report says the US regulator is examining whether the banks misled shareholders about the number of loans they could be forced to buy back due to early defaults.
We should also hear more about plans to sell the London Metal Exchange. Reuters reports up to 9 suitors are eyeing the exchange. The CEO will join CNBC's Squawk Box at 8:20 CET.
In corporate news we are expecting third quarter numbers from fashion giant H&M. Analysts expect profits to be down by nearly a fifth due to higher costs and discounting.