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

Kevin Buckland

Escalating hostilities in the Middle East gripped the

attention of traders and investors in Asia on Wednesday as

worries lingered over the possibility of a wider war.

Crude oil continued its march higher, gold hovered close to

its all-time high and bonds were bought along with the

safe-haven dollar.

But some markets were willing to look past the risks,

particularly in Hong Kong, where the benchmark Hang Seng stock

index surged more than 4% as the market's sugar rush from

China's stimulus announcements showed little sign of fading. The

euphoria might have gained even more momentum if mainland

Chinese markets hadn't shut for the Golden Week holiday.

The risk-sensitive Australia and New Zealand dollars

rebounded. Both countries have close links to the fortunes of

China, a top trading partner.

European stock futures currently point to a higher open.

Iran has said its attack is over, barring further

provocation, after a salvo of some 180 ballistic missiles. But

Israel - fully backed by the United States - vowed a response.

There's little to distract from Middle East developments

during Europe's day, with a dearth of macroeconomic data or

scheduled corporate announcements.

The course of British ties with the European Union could be

steered, however, by UK Premier Keir Starmer's first talks on

issues such as trade and security with European Commission

President Ursula von der Leyen in Brussels. Both sides have been

talking about a "reset".

There is a host of ECB speakers on the calendar for

Wednesday, including Vice President Luis de Guindos and chief

economist Philip Lane, although a quarter-point rate cut this

month looks all but assured following a run of mild inflation

readings and hints from ECB boss Christine Lagarde.

When it comes to monetary policy, the Fed is likely to

garner more attention. On Friday we'll get monthly payrolls

figures, which could be make-or-break for whether U.S. policy

makers opt for a 25- or 50-basis-point rate reduction next

month. We'll also get some hints from the private-sector ADP

employment report later today.

In fact, the U.S. day has a lot to keep markets occupied, if

the Middle East situation stabilises.

A quick end to the massive dock worker strike that is

halting half of the country's shipments looks unlikely, with no

active negotiations seen overnight. The walkout, hitting

everything from cars to corn, may cost some $5 billion per day.

Key developments that could influence markets on Wednesday:

-Euro zone unemployment rate (Aug)

-ECB speakers including de Guindos, Lane

-European Commission President von der Leyen talks with UK

PM Starmer

-U.S. ADP employment (Sep)