Morning MoneyBeat Europe: Will Market Ructions Mean Less Hawkish Fed?

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Good Morning Europe

Forecasters expect a weak open for the mainboards Wednesday although the outcome of the Federal Reserve's final monetary policy meeting for 2014, due after European markets close, is likely to limit heroics in either direction.

Many investors suspect that the Fed may dial back the hawkish rhetoric given the past couple of weeks' market ructions stemming from plunging oil prices and the collapsing ruble.

Russia will remain in focus Wednesday of course, as will Greece, where the first round of voting in this month's snap presidential election kicks off in parliament. On the data front we'll get a look at eurozone inflation, with a weak print likely to spur more calls for stimulus from the ECB.

Market Snapshot: U.S. markets (Tuesday close) DJIA down 0.7%, Nasdaq down 1.2%, S&P 500 down 0.9%. Nikkei (Wednesday close) up 0.4%. Brent crude down 76 cents at $59.25, Nymex crude down $1.18 at $54.75. Gold up $4 at $1198.30. EUR/USD $1.2485, USD/JPY ¥117.04. 10 year Treasury yield 2.06%, Bund 0.59%, Gilt 1.77%.

Watch For: Well, we could point out that there's plenty of juicy economic data due. We'll get U.K. labor numbers, the minutes of the Bank of England's last monetary policy meeting, the eurozone's consumer price index and its U.S. equivalent and one or two other bits and pieces. But we'll also get the Feds' final policy statement for 2015, and the wait for that is all-too likely to override all else.

What you missed on MoneyBeat:

Recap: Across the Globe, Wild Swings for Markets : Shockwaves from collapsing oil prices were reverberating through markets in all corners of the globe Tuesday, hitting stocks, currencies and commodities. Intense selling pressure on the Russian ruble continued despite a steep emergency rate increase by the Russian central bank late Monday.

5 Reasons for Investor to Care About Russia’s Market Turmoil: It might be tempting to think in realpolitik terms about Russia’s financial woes right now — the idea that a weakened Russia has less weight to throw around in conflicts such as the Ukraine and Syria. But the reality is that a plummeting ruble and the disarray in that country’s markets pose real threats to the global economy.

Will Russia Need to Use Capital Controls?: Russia has tried shock and awe and it hasn’t worked. A 6.5 percentage point interest rate hike has done nothing to halt the ruble’s decline. Now the policy toolbox is low on options, say analysts, and measures to curb exchanging the ruble for other currencies are moving into sharper focus, they say.

Big Banks Pass U.K. Stress Tests, but the Regulator Has Complaints: Big U.K. banks may have got through the country’s stress tests relatively unscathed (of the eight banks tested, only one, the Co-Operative Bank, needed to submit a revised plan to pass) but when it comes to crunching data and engaging with their regulator, there is room for improvement.

RBS Gets Math Help in U.K. Stress Test: It got its sums wrong in European stress tests, so U.K. told RBS to get its homework checked before handing it in.

Jumbo Corporate Bond Deals Find Broad Base: Last year may have seen the largest bond deal on record, but it was during 2014 that such mega deals gained a broader following.

Repsol Reaches Out — Energy Journal : Spain’s Repsol SA reached a deal to buy Canada’s Talisman Energy Inc. for US$8.3 billion in cash, which will almost double the Spanish company’s oil production. The deal was approved unanimously by both boards.

EU Officials Weigh In on Greek Elections: Will It Backfire?: European officials have explicitly backed the current government of Prime Minister Antonis Samaras in Greece’s latest political drama — a break with traditional practice that risks backfiring.

Wealth Adviser: The Challenge of Investing in Bonds : For wealth managers, crafting a strategy for bond investing has been, and is likely to remain, a real challenge.

Overnight Action:

Oil Prices Continue Skid : U.S. oil prices resumed their downward slide in early Asian trade Wednesday, while Brent stayed below the $60 mark after Russia said it wouldn’t cut its oil output next year.

Markets Take Wild Ride on Ruble, Oil : Broad swings rattled global trading on Tuesday, as the fallout from the oil-price collapse and the Russian ruble’s plunge whipsawed markets and sent U.S. stocks to their third consecutive decline.

Pimco Emerging Fund Takes Hit : Fund has lost 9% this month.