Surely the most fun story today, unless you are an Alphabet shareholder, is Google's new Bard AI flunking a question on the James Webb telescope. And it was an own goal given the error was in a Twitter video put out by Google itself, ouch.

Alphabet's shares sank almost 8%, wiping a cool $100 billion off its market cap, and dragging all of Wall Street down. But it did produce one of our best headlines of the session: "Alphabet's Bard apparently no Shakespeare." Eat your heart out AI.

There's been scant fun in Asian markets with everyone already stressing about next week's U.S. CPI report and what that will mean for the likely peak of Fed rates.

In Europe, the Riksbank meeting will be interesting if only because both the governor and deputy are new to the roles, so there's no knowing if the central bank's reaction function has changed.

Markets are priced for a half-point hike to 3.0%, in part to match the ECB and stop the SEK from weakening yet further. It's been falling steadily on the euro since late 2021, making it all the harder to fight inflation.

Assuming it goes 50 bps, and not 75 bps, the focus will be on the outlook for further tightening. Markets are fully priced for a move to 3.25%, with 3.5% an even bet.

If this week's hikes by central banks in India and Australia are anything to go by, the risk is for a hawkish outcome in Sweden.

Further out, JPMorgan analysts note household debt in Sweden is twice the EU average making it tough for the Riksbank to keep a half-point spread over ECB rates.

"Monetary policy in Sweden is clearly more restrictive than in the Euro-area," they say. "If the ECB therefore ends up with a 3.25% terminal rate (our forecast), we think the Riksbank will not be able to follow suit and take the policy rate to 3.75%."

There are blessedly no Fed speakers today, but Bank of England Governor Andrew Bailey will be grilled by lawmakers - among the few people in the country not on strike - about its recent rate rise and the ever-growing risk of recession.

The BoE line has been they may have done enough, but are not sure and are ready to do more if needed.

Key developments that could influence markets on Thursday:

- Riksbank rate decision and Feb monetary policy report due at 0830 GMT. Governor Erik Thedéen and Jesper Hansson, head of the Monetary Policy Department hold presser at 1000 GMT

- BoE Governor Bailey speaks to lawmakers at 0945 GMT

- The delayed German Jan CPI is due at 0700 GMT and could cause fireworks if stronger than the forecast 8.9% y/y

(Editing by Jacqueline Wong)