A look at the day ahead in European and global markets from Tom

Westbrook

The strongest quake to hit Taiwan in at least 25 years has

also hit a pressure point in the global supply chain.

The island accounts for about 90% of production for

chipmaker TSMC and while its plants are mostly on the

opposite coast from the epicentre, they are full of fragile

equipment that's crucial to turning out chips for global firms.

TSMC said it had evacuated some fabrication plants and its

safety systems were operating normally, while it confirmed

details of the impact. The quake has killed four people, knocked

down buildings in the eastern county of Hualien, and was felt in

Shanghai as aftershocks rattled Taipei through the morning.

Serious damage to chip foundries would ripple around the

world and highlight the urgency of U.S. President Joe Biden's

strategy of encouraging onshore production to reduce reliance on

Taiwan's output.

Shares of TSMC, which has a more than 60% share of global

contract chipmaking and a monopoly over advanced

microprocessors, were down 1.4% in early trade.

Apple ( AAPL ) supplier Foxconn's ( FXCOF ) stock fell more

than 2% and shares of flat-panel maker Au Optronics

dropped 1.7%. Markets more broadly also slipped as investors

await an appearance from U.S Federal Reserve Chair Jerome Powell

and U.S. services and jobs figures due later in the day.

Easter Monday's stronger-than-expected U.S. manufacturing

data seemed to trigger selling in the bond market that pushed

benchmark 10-year yields past major chart resistance, unleashing

even more selling.

Ten-year yields steadied at 4.35% in Asia trade

on Wednesday. An uneasy calm has settled on foreign exchange

markets, with traders leery of testing the mettle of Japanese

authorities who have ramped up warnings of possible

intervention.

The yen was steady at 151.55 per dollar.

European inflation figures are also due later in the

session, with a slight cooling expected.

Key developments that could influence markets on Wednesday:

Economics: Euro zone inflation, U.S. non-manufacturing ISM,

ADP employment

Speeches: Fed's Powell