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

It's Fed Day, and it looks increasingly certain that it will be Jerome Powell's curtain call as chair. By the time the Federal Open Market Committee wraps up, the Senate is expected to be voting on Kevin Warsh's confirmation, setting the stage for one of the most consequential periods at the world's most powerful central bank.

Fed funds futures are pricing a 100% probability of a hold, with no policy changes expected until well into 2027. But with the FOMC looking more divided than ever, questions remain about how Warsh will navigate the central bank's relationship with the White House as U.S. President Donald Trump continues to loudly demand quick and aggressive rate cuts.

Debate on Powell's legacy will likely centre on his defence of the Fed's independence in the face of relentless pressure from Trump - who appointed him in the first place. It's also not yet clear whether Powell will stick around as a Fed governor after his term as chair officially ends on May 15.

Markets, meanwhile, are treading carefully on Wednesday, with S&P 500 e-mini futures up 0.1% and MSCI's broadest index of Asia-Pacific shares outside Japan erasing earlier losses to trade flat. Traders are juggling Fed uncertainty alongside a simmering geopolitical standoff, as the diplomatic impasse between Washington and Tehran over ending the war hangs over markets. The Wall Street Journal reported on Tuesday, citing U.S. officials, that Trump has instructed aides to prepare for an extended blockade of Iran.

Tech didn't offer much comfort either. Chipmakers in Asia took a hit after the Journal reported that AI heavyweight OpenAI had missed internal targets for weekly users and revenue, raising concerns about whether the ChatGPT parent can sustain its massive spending on data centres. The report had earlier weighed on shares of Oracle and CoreWeave in Wall Street trading.

In early European trades, pan-region futures and German DAX futures were flat, while FTSE futures were down 0.2%.

And finally, M&A advisors may be nursing a hangover after trying to mix too many spirits. Pernod Ricard and Brown-Forman ended merger talks after the French spirits company and the Kentucky-based owner of Jack Daniel's whiskey failed to reach mutually acceptable terms.

Key developments that could influence markets on Wednesday:

European earnings:

Deutsche Bank, Amundi , Mercedes-Benz , Norsk Hydro ( NHYKF ), AstraZeneca ( AZN ), GSK, TotalEnergies, Universal Music Group.

U.S. earnings:

Alphabet, Microsoft ( MSFT ), Amazon.com ( AMZN ), Meta, AbbVie ( ABBV ), Qualcomm ( QCOM )

Economic events

Euro Zone: Money-M3 Annual Growth for March, Business Climate, Consumer Confidence, Economic Sentiment, Industrial Sentiment, Services Sentiment for April

Germany: Preliminary CPI and HICP for April

Debt auctions

Germany: 10-year bund auction