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

Big Japanese companies have agreed in full to union pay demands, a sign that workers could perhaps have pushed a bit harder, but also that wage momentum could encourage a historic policy shift by the Bank of Japan.

While hotter-than-expected U.S. inflation - and the risk of upside surprises elsewhere - is pushing back bets on rate cuts in much of the world, there is growing speculation that Japan will end its experiment with negative interest rates next week.

Wages are front and centre as a driver of a positive feedback loop reinforcing Japanese spending and confidence. Pay rises at Toyota Motor were the biggest in 25 years and the yen drew support from signs of a sustainable revival in Japan's economy.

Monthly British growth figures are due in the London morning, followed by European industrial production numbers that are expected to turn sharply negative. British monthly GDP is seen rising 0.2% for January after a 0.1% drop in December, although it is hard to read much from such frequent releases.

Markets haven't fully priced a Bank of England rate cut until August this year, helping to support sterling. The British currency is testing the strong side of a range it's kept on the euro for nearly a year.

Incidentally, Deutsche Bank published a report overnight noting the long decline in euro/dollar volatility.

Strategist Alan Ruskin says this could be explained by reduced worries about eurozone stability since Mario Draghi promised to do "whatever it takes" to save the euro, as well as a balance in transatlantic flows and a shift of volatility elsewhere.

Perhaps the allure of crypytocurrencies and the outperformance of U.S. shares are keeping gamblers out of FX bets.

Key developments that could influence markets on Wednesday:

Earnings: Adidas

Economics: British GDP, eurozone industrial production

Speeches: ECB's Cipollone