A look at the day ahead in U.S. and global markets by markets correspondent Naomi Rovnick.

The ghosts of inflation past, present and future are haunting global markets on Wednesday as the U.S. October consumer prices report due later in the day threatens to raise fears about what President-elect Donald Trump's tax and tariff policies will bring.

Economists polled by Reuters expect U.S. year-on-year inflation rose to 2.6% last month, adding to prospects of high-for-longer interest rates that have sent two-year Treasury yields to their highest since July as the dollar stands tall.

A potential return to the inflation angst that dominated markets through 2022 and 2023 means the latest equity market rally, driven by Trump's anticipated business deregulation and tax cuts, looks vulnerable.

Asian markets sagged on Wednesday, Wall Street futures imply another edge down from record levels hit last week and Europe's Stoxx 600 share index is flat.

Bitcoin has eased about 0.8% after its post-election surge close to $90,000.

The euro, one of the major victims of Trump trades, is on course for its fourth consecutive daily drop on Wednesday after briefly falling trade below $1.06, around its weakest in a year.

But while markets are gripped by expectations Trump will hike government borrowing and raise consumer prices with 60% import tariffs on China, he could move more cautiously.

Voter anger about inflation, which rose about 20% in four years, was one reason for Trump's resounding election and sustained price rises could be politically toxic.

The President-elect also wants to slash what he views as wasteful government spending and has tasked Tesla billionaire Elon Musk with leading an efficiency drive.

Elsewhere in markets on Wednesday, a Japanese bond selloff driven by rate hike expectations has taken five-year yields to a 15-year high and the yen has dropped beyond 155 per dollar, around its weakest since July 30.

Sterling, almost 7% lower in two months, remains in the spotlight ahead of finance minister Rachel Reeves and Bank of England Governor Andrew Bailey's closely-watched Mansion House speeches on Thursday.

Key developments that could influence markets on Wednesday:

-US CPI (Oct) -Dallas, St Louis, Kansas City Fed chiefs speak at separate events -BoE's Catherine Mann speaks

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(Editing by Christina Fincher)