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

Investors broadly took the U.S. presidential debate between Donald Trump and Kamala Harris in stride where details were scarce but jabs aplenty. The spotlight though belonged to Taylor Swift, who right after the debate endorsed Harris.

Asian markets were broadly lower and U.S. stock futures slipped, with the dollar on the back foot as both candidates clashed over issues such as immigration, foreign policy and healthcare, but the debate was light on specific policy details.

Online prediction market PredictIt's 2024 presidential general election market showed Trump's likelihood of victory declining after the debate, to 48% from 52%. Harris' odds improved to 56% from 53%.

All that has meant investors will remain jittery till the November election as they try to gauge the economic policies from both candidates and ascertain who may yet win.

The focus for markets now shifts to the U.S. inflation reading later in the day, although the U.S. central bank has made it clear employment has taken on a greater focus than inflation.

While the Federal Reserve is likely to cut rates next week, there is fair amount of uncertainty around the size of the cut. Markets are pricing in one out of three chances of a 50 basis point cut and anticipate 114 bps of easing this year.

Futures indicate European bourses are due for a lower open as traders, with not a lot of economic data in the day, will likely focus on Fed moves ahead of the European Central Bank meeting on Thursday where it is expected to cut rates.

Meanwhile, the yen surged to an eight-month high after a boost from Bank of Japan board member Junko Nakagawa, who reiterated in a speech on Wednesday that the central bank would continue to raise rates if the economy and inflation move in line with its forecasts.

Key developments that could influence markets on Wednesday:

Economic events: UK GDP estimate for July and UK Industrial and manufacturing output for July; US inflation report

(By Ankur Banerjee; Editing by Muralikumar Anantharaman)