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

Westbrook

Oil prices slipped as worries about the demand outlook

weighed broadly on commodities, while Asian equities and

European stock futures eased in an otherwise quiet session ahead

of key central bank decisions in the U.S., Japan and Britain.

Inflation readings in Germany and Spain, which could

influence the outlook for euro zone rate moves, and a smattering

of earnings fill out the countdown to the week's rate policy

events.

Europe also gets preliminary GDP data, although inflation

will probably take what room is left on centre stage since

markets have all but priced in an ECB rate cut in September and

so would be vulnerable to upside surprises on consumer prices.

Oil prices were at a seven-week low, with demand-related

worries for now eclipsing concern that war in Gaza is at risk of

spreading into Lebanon as tensions rise between Israel and the

Iranian-backed Lebanese movement Hezbollah.

The yen took a breather after sharply rebounding

over the past two weeks from this month's 38-year low. The

currency has been buoyed as investors unwind popular carry

trades around the world.

Earnings reports from Microsoft ( MSFT ) and AMD will be closely

watched later on Tuesday, as investors seek clues on appropriate

valuations after a recent tech-sector rout.

In Europe, results at BP and Rio Tinto, Airbus and

consumer-focused firms such as L'Oreal could give a steer as to

economic conditions along the supply chain.

The main events are this week's rate policy meetings, and

market moves are likely to be capped until those are out of the

way.

After a benign June inflation report, investors bet the

Federal Reserve will lay the groundwork for a September rate cut

at its policy meeting on Wednesday.

Futures are fully priced for a quarter-point easing and even

imply a 10% chance of 50 basis points, and have 66 basis points

of easing priced in by Christmas.

Economists polled by Reuters expect the cuts would allow the

world economy to keep growing steadily.

The Bank of Japan's policy decision, also on Wednesday,

looms over Japanese assets. Sources have told Reuters that a

rate hike will be discussed and policymakers may also unveil a

plan to roughly halve its bond purchases in the coming years.

Markets price a near 60% chance of a 10 basis point hike,

with another 10 basis points expected by year's end.

The Bank of England meets on Thursday with markets pricing a

roughly 40% chance of a 25 basis point rate cut.

Key developments that could influence markets on Tuesday:

Economics: Eurozone preliminary GDP, CPI for Germany, Spain

and Belgium, U.S. job openings.

Earnings: Airbus, L'Oreal, Rio Tinto

, BP, AMD, Microsoft ( MSFT ), Starbucks ( SBUX )

, Archer-Daniels-Midland ( ADM ), Procter & Gamble ( PG )

, Mondelez ( MDLZ ).