A look at the day ahead from Sujata Rao.

COVID fears, the approach of year-end and the Fed signalling policy tightening -- it's a recipe for turbulence and that's what we are seeing. The VIX, an equity volatility index dubbed Wall Street's fear gauge, has soared above 30%, double the placid levels of mid-November.

The discovery of a single U.S. Omicron case turned Wall Street traders' screens red, quickly reversing what had been a buoyant session following a record stock market close in Europe.

Sentiment in the investor community, keen protect any year-to-date portfolio gains, is clearly turning on a dime.

Bond and currency volatility too have spiralled to the highest since last March and December respectively,.

On Thursday, Asia picked up the selloff baton from New York and the downtrend continues into Europe. U.S. futures though signal a higher open, at least for now.

Listen out for a raft of Fed speakers -- their last airing before the pre-meeting quiet period. The hawkish messages are loud and clear; Cleveland Fed boss Loretta Mester -- a voting Fed member next year -- reckons the bank should be able to squeeze in a couple of rate hikes next year.

More money poured into Treasuries, with 10-year yields now down more than 20 basis points from a week ago.

Over in Europe, German 10-year yields are close to 2-1/2 month lows touched recently. For signs of stress, also watch Italy, whose bond yield premium over Germany this week has gaped wider and is at the highest since last October.

Finally, oil remains on shaky ground amid the Omicron worries and travel curbs. An OPEC+ meeting later in the day will decide whether to proceed with the monthly output increase or to curb supply.

Vol hasn't bypassed oil markets either -- Brent futures jumped $20 from August though October, fell almost $10 by mid-November and are down a further $10 since then

Key developments that should provide more direction to markets on Thursday:

-Euro zone PPI/unemployment

-ECB speakers: ECB Board Member Fabio Panetta

-Fed speakers: San Francisco President Mary Daly , Richmond President Thomas Barkin, Altanta President Raphael Bostic

-Emerging markets: Brazil Q3 GDP, India trade balance

-U.S. initial jobless claims Graphic: Volatility on rise, https://fingfx.thomsonreuters.com/gfx/mkt/lbpgnlnjrvq/Pasted%20image%201638397673021.png