Morning Bid: Hot spots sizzle, CPI looms

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

Global flash points tried hard to steal the spotlight from a U.S. inflation report that could set the tone for September's Fed meeting.

Houthis launched a fatal attack on an Egyptian ship in the Red Sea, with no end in sight to the war in Iran. North Korea lobbed another ballistic missile into the ocean, and Taiwan protested China's planned naval drills off the island's east coast.

Brent crude prices rose for a sixth straight session, poised for the longest streak since late April and highlighting mounting pressure on central banks to contain energy-driven inflation. The Reserve Bank of Australia delivered a hawkish hold on policy rates on Tuesday, while traders are increasingly betting the Bank of Japan could tighten again as soon as next month.

Today's consumer price index data in the U.S. won't capture the most recent rise in energy costs, but it is still likely to shape expectations for the Federal Reserve's September meeting, with money markets showing an even chance of a hike.

U.S. consumer prices are expected to have increased 0.1% last month after falling 0.4% in June, according to a Reuters poll. Annual CPI inflation is forecast to slow to 3.4% from 3.5% a month earlier.

The data follows a bad miss on U.S. payrolls last Friday, highlighting the narrow path for Fed officials in balancing support for the economy and keeping inflation in check.

Fed rate prospects will weigh heavily on currencies, with the yen having given up much of its gains. The yen slid to 159.45 per dollar in Asian trade, the weakest since coordinated intervention between Japan and the U.S. bolstered the currency to the 155.2 level last week.

Futures pointed to a slightly lower open in European markets, with the pan-region Euro Stoxx 50 contracts down 0.06%. German DAX futures were 0.08% lower, and FTSE futures slid 0.25%. U.S. stock futures, the S&P 500 e-minis, were up 0.11%.

Key developments that could influence markets on Wednesday:

--July CPI data for the U.S., Germany, Italy

--Q2 results for Bechtle AG, Sampo Oyj, ABN Amro Bank NV

--United Kingdom RICS Housing Survey for July

(Reporting by Rocky Swift in TokyoEditing by Shri Navaratnam)