European stocks were called to open lower on Thursday, tracking Asia overnight where shares and the euro fell amid disagreement between France and Germany over the role of the European Central Bank in resolving the sovereign debt crisis.
The FTSE is called 57 points lower, the DAX in Frankfurt is expected to open down by 98 points and the CAC 40 is called lower by 48 points.
France and Spain will hold bond auctions on Thursday, after modest bond purchases failed to calm markets and financial institutions seemed reluctant to purchase European bonds for fear of counterparty exposure to sovereign debt.
France and Germany clashed again on Wednesday over the role of the ECB and whether the European Financial Stability Facility should be granted a banking license to enable it to borrow from the European Central Bank.
Germany is strongly opposed to the idea, but France, facing rising borrowing costs and keen to hold on to its 'AAA' credit rating, is pushing for greater ECB intervention.
French Finance Minister Francois Baroin made his nation's position clear on Wednesday, telling journalists: "The position of France… is that the way to prevent contagion is for the EFSF to have a banking license."
Italy and Greece are likely to remain in the spotlight on Thursday as Italian Prime Minister-delegate Mario Monti goes to the Italian Senate to seek approval for his new government and a sweeping package of economic reforms.
Monti will present his program to the Senate at 12:00 London time and a confidence vote on the measures is expected to take place on Thursday evening.
Greek Prime Minister Lucas Papademos won a vote of confidence in his newly formed government on Wednesday, but he is still likely to face difficulties after New Democracy leader Antonis Samaras refused again to provide a written guarantee to Brussels that Greece will meet the terms of its latest bailout package.
Former IMF European Director Antonio Borges was replaced on Wednesday by Reza Moghadam, a move many analysts have praised as a sign that the fund is serious about deal with the debt crisis in the euro zone.
France will sell between 6 and 7 billion euros ($9.45 billion) of medium-term fixed-rate notes (BTANs) and 800 to 1.2 billion euros of index - linked bonds at an auction on Thursday.
Results are expected in two parts; fixed-rate notes at 9:50 UK time and inflation-linked bonds at 10:50.
The Spanish Treasury will attempt to sell between 3 billion and 4 billion euros worth of ten year bonds on Thursday.
Key earnings out of Europe include interim results from brewer SAB Miller and tech firm Investec as well as third quarter statements from energy firm Centrica and Glencore .
The National Grid is also set to announce half year results on Thursday.
Economic data to watch includes EU construction output at 10:00 London time and the ZEW indicator of economic sentiment for Switzerland, also out at 10:00.