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

Gregor Stuart Hunter

With the conflict in the Middle East still mired in a

stalemate, Donald Trump is on his way to Beijing to see if

Chinese President Xi Jinping proves more amenable to a deal.

The U.S. president is due to arrive in China later today,

saying he is seeking to "open up China", accompanied by a string

of chief executives - including Nvidia ( NVDA ) CEO Jensen

Huang, a last-minute addition to the roster.

Ahead of the talks, Beijing seems more keen to focus on

Taiwan. China's government said its resolve to oppose Taiwan

independence is "as firm as a rock" and its capability to

"crush" separatism is "unbreakable".

There are some signs of a détente though. China and the U.S.

are considering extending a truce on Chinese rare earth export

curbs, although customs data shows Beijing is still throttling

shipments of the materials vital for defence and manufacturing.

The growing economic toll of the Middle East conflict has

started to weigh on markets, following Tuesday's

hotter-than-expected U.S. inflation data.

Traders have largely priced out any chance of a rate cut

from the Fed this year and are starting to think a hike may be

more likely. Expectations for an increase in the federal funds

rate of at least 25 basis points at the December meeting have

risen to more than 35% from below 22% earlier in the week,

according to CME's FedWatch Tool.

That prospect sent a chill through markets on Wednesday, but

regional shares recovered in trading later on. S&P 500 e-mini

futures were up 0.1% while MSCI's broadest index of

Asia-Pacific shares outside Japan edged up 0.1%

after earlier declines.

Korean shares fell as much as 3.2% before rebounding

to rise 2.4%, with Samsung Electronics ( SSNLF ) shares

plummeting as much as 6.1% before rallying to trade 1.8% higher,

after the electronics behemoth failed to reach a pay deal with

its South Korean labour union on Wednesday.

That sets the stage for more than 50,000 workers to go ahead

with a full strike that threatens to disrupt production of AI

and other chips.

In early European trade, pan-region futures rose

0.6%, German DAX futures were up 0.4% and FTSE futures

were 0.5% higher.

Key developments that could influence markets on Wednesday:

Earnings releases:

Cisco ( CSCO ), Alibaba ( BABA ) , Manulife

, Takeda Pharmaceutical ( TAK ), Sumitomo Mitsui

Financial Group ( SMFG ), Allianz, Siemens

and Alstom

Economic events:

U.S.: PPI for April, EIA crude oil stocks

France: ILO unemployment rate for Q1, CPI for April

Germany: Wholesale price index for April, current account

balance for March

Debt auctions:

Germany: 28-year government debt

​