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

Rocky Swift

A day after U.S. President Donald Trump re-emerged in the

Oval Office to dispel rumours about his health, Chinese

President Xi Jinping made a defiant show of strength at his

nation's largest ever military parade.

Trump returned from days of public absence to face court

challenges to his tariff policies, immigrant deportations, and

ability to fire any public official he pleases.

The optics were very different in Beijing, as Xi, Russia's

Vladimir Putin and North Korea's Kim Jong Un watched processions

of missiles, tanks and drones. Kim even followed the "bring your

daughter to work" tradition, showing off to the world his

potential successor and evidence that autocracies still have a

lot of life in them.

Away from geopolitics, bond markets are again sounding alarm

over mounting government deficits and debt piles. U.S. Treasury

yields ticked up in Asian trading and Japan's 30-year yields

reached an all-time high.

Sterling sank even lower after a 1.1% slide on Tuesday when

30-year gilt yields soared to the highest since

1998.

With stocks shaky and bonds looking perilous, you can always

count on gold. The precious metal hit an all-time high of

$3,546.99 in the Asian trading day.

On the data front, purchasing managers indexes (PMIs) for

the euro zone and Britain will lead the way, with July JOLTS

figures in the United States to follow as a prelude to key

nonfarm payrolls on Friday.

Markets are pricing in an 89% chance of a 25-basis-point

reduction in the Federal Reserve's key policy rate this month,

and weak labour data would increase the odds for more cuts.

Equity futures are pointing to openings in positive

territory in Europe, with the pan-region Euro Stoxx 50 contracts

up 0.34% at 5,317, German DAX futures gaining

0.3% to 23,609, and FTSE futures inching up 0.1% at

9,151.

And keeping on the positive theme, Trump sounded a

conciliatory note to Xi, posting on social media: "Please give

my warmest regards to Vladimir Putin and Kim Jong Un as you

conspire against the United States of America."

Key developments that could influence markets on Wednesday:

- PMIs for Britain, euro zone, Chicago

- Bank of England's Sarah Breeden and Catherine Mann speak

at separate events

- European Central Bank President Christine Lagarde speaks

- Euro zone PPI inflation (July)

- France: Reopening of 3-month, 4-month, 6-month and

11-month government debt auctions

- Germany: Reopening of 7-month, 2-year, 7-year and 10-year

government debt auctions

- Britain: - Reopening of 1-month, 3-month, 6-month and

3-year government debt auctions

- Federal Reserve officials scheduled to speak include St.

Louis Fed President Alberto Musalem and Minneapolis Fed

President Neel Kashkari

- U.S. data durable goods and JOLTS job openings for July

(Editing by Jacqueline Wong)