Economic calendar: Markets focused on Pelosi visit to Taiwan

• European markets set for lower opening

• US-China relations on watch as Pelosi visits Taiwan

• Earnings reports from Caterpillar, PayPal and AMD among others

An increase in risk aversion can be spotted on global financial markets since it was confirmed yesterday that US House Speaker Pelosi will visit Taiwan this afternoon. She is expected to arrive on the island around 3:30 pm BST, in a move that is surely to anger China. This is a key event of the day and the market will closely watch the Chinese response. China has already announced that it will conduct military drills in the area over the coming days in a show of power. While some Chinese media hint at possibility of direct military strike at Pelosi's plane, such a move is considered rather unlikely as the United States would have to respond to assassination of the third highest ranking US official, what could lead to China-US war. Nevertheless, expect markets to be nervous in the afternoon.

Economic calendar for today is empty with API oil inventories report being the only noteworthy release. However, inventors will be offered earnings reports from a number of big US companies, including AMD, PayPal or Caterpillar.

3:30 pm BST - US House Speaker Pelosi expected to arrive in Taiwan

9:40 pm BST - API report on US oil inventories. Expected: -0.4 mb

Top Wall Street earnings releases

• Advanced Micro Devices (AMD.US) - after market close

• Airbnb (ABNB.US) - after market close

• Caterpillar (CAT.US) - before market open

• Electronic Arts (EA.US) - after market close

• Gilead Sciences (GILD.US) - after market close

• Marathon Petroleum (MPC.US) - before market open

• Marriott International (MAR.US) - before market open

• MicroStrategy (MSTR.US) - after market close

• Occidental Petroleum (OXY.US) - after market close

• PayPal Holdings (PYPL.US) - after market close

• Starbucks (SBUX.US) - after market close

• Uber Technologies (UBER.US) - before market open