Marketmind: Another brick in the wall

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

The last Soviet president has died and is to be buried with a Russia he brought closer to Europe at loggerheads once more, and a wall of worry looming over markets and politics.

For the second time in as many months, Russia has shut off gas flow along the Nord Stream pipe to Germany.

Investors seem to be filling in the nervous wait until Saturday morning, when supply is expected to resume after pipeline maintenance, by worrying about interest rates.

Markets are leaning toward 75 basis point rate rises on both sides of the Atlantic next month and have begun taking good economic news badly where it bolsters the case for hikes.

Data out during the day is expected to show European inflation hit record high of 9% in August. Canadian growth figures and partial U.S. labour data are also due.

The euro, for now, is clinging unconvincingly to parity and Europe's gas prices have backed down from record highs, though it is little relief as the cost of gas has tripled since the middle of June.

Asian markets struggled as weak data there is viewed as more straightforwardly bad. China's factory activity extended declines in August. Lockdowns are expanding. The Shanghai Composite hit a four-week low.

Graphic: Russia pipeline gas supplies to Europe - https://graphics.reuters.com/UKRAINE-CRSIS/RUSSIA/movangrozpa/chart.png

Key developments that could influence markets on Wednesday:

Economic data: Eurozone inflation, Canadian GDP, U.S. ADP employment

Speakers: Fed's Loretta Mester, Lorie Logan and Raphael Bostic

(Reporting by Tom Westbrook; Editing by Sam Holmes)