European stocks were called to open lower on Wednesday after Asian shares and the euro fell overnight amid persistent fears that major economies within the euro zone might not be able to escape contagion from the debt crisis.
London's FTSE is expected to open lower by 29 points, Germany's DAX is called down by 46 points and the CAC 40 in Paris is predicted to start the day 18 points lower.
There were modest gains on Wall Street ending a session of thin, choppy trade on Tuesday; following news that Italian Prime Minister-delegate will meet with the nation's president on Wednesday to form a new government in the heavily indebted euro zone country.
However, rising borrowing costs are hitting other common currency nations hard and there are increasing concerns that triple-A rated France could be the next significant European economy to be engulfed by the crisis.
A mass selloff of euro zone bonds on Tuesday indicated that investor fears are now extending beyond countries like Spain and Italy and the focus is shifting to France, Austria and the Netherlands, with French and Austrian borrowing costs hitting record levels in comparison with those of Germany.
There was more bad news for the common currency in Asia overnight, where the euro hit a five-week low against both the dollar and the yen, falling to $1.3453 against the US currency and 103.66 yen.
European Central Bank Governing Council member Yves Mersch said in a speech at European Finance Week in Frankfurt that allowing inflation to rise was not a "feasible option" for the euro zone and "the euro area must remain focussed on delivering price stability."
There was some good news out of the US on Tuesday as retail sales increased in October and manufacturing in New York state rose for the first time since May.
Treasury Secretary Timothy Geithner said that Europe was making "gradual progress" in coming to grips with its crisis, but he stressed as well as ensuring stability within the euro zone, leaders must also look at ways to stimulate growth.
The focus will once again be on Italy on Wednesday as Prime Minister-delegate Mario Monti attempts to form a new government.
Monti is expected to announce a cabinet made up mostly of technocrats who will be expected to implement a program of tough reforms and austerity measures to restore confidence in the Italian economy.
In London, anti-capitalist protesters camping outside St Paul's Cathedral in the city's financial district will be asked to clear their tents within 24 hours, just a day after Occupy Wall Street campers in New York were cleared from Zuccotti Park.
German Chancellor Angela Merkel will meet with Irish Prime Minister Enda Kerry in Berlin, with Kerry also due to meet German Finance Minister Wolfgang Schaeuble.
Monthly unemployment figures for the UK are due out on Wednesday and will be available at 9:30 London time, while Spanish third-quarter gross domestic product data is released at 8:00.
The London Stock Exchange Group will announce first-half trade data on Wednesday, while ICAP releases its interim results.
French media conglomerate Vivendi is also due to report on Wednesday.
Full-year figures from German technology firm Infineon recorded 21 percent sales growth to 4 billion euros, while group net income was in excess of 1 billion euros.