A look at the day ahead in U.S. and global markets from Mike Dolan.

With the Federal Reserve still talking tough on U.S. interest rates, world markets switched attention back to Britain as it unveils revised plans on Thursday to rein in public finances and inflation with a severe tax and spending squeeze.

After the chaos of September's botched giveaway budget, it's clear why the UK story matters to world markets - revealing as it did the limit to which bond markets will tolerate unfunded tax cuts and ballooning borrowing in a G7 power while inflation is rising.

Long-term sovereign bond yields have been falling sharply all week in advance of finance minister Jeremy Hunt's new budget, dragged down largely by U.S. disinflation hopes.

UK 10- and 30-year gilt yields outperformed, however, dropping to their lowest since early September before backing up slightly on Thursday. The pound also gave back some the week's gains into the 1130GMT speech.

Hunt plans to tackle a 55 billion-pound ($65.70 billion) budget gap by freezing thresholds and allowances on income tax, national insurance, inheritance tax and pensions for longer while slashing more than 20 billion pounds of government spending.

Perhaps as important for investors is what the independent Office for Budget Responsibility, which did not release a breakdown of the impact of the September budget, makes of the new plan and its impact on an economy heading into recession.

Swooning U.S. Treasury yields also backed up a bit on Thursday despite a mixed picture of strong US retail sales but weak industrial and housing readouts.

Fed officials seem determined not to signal any end to their tightening campaign. San Francisco Fed President Mary Daly, once one of the more dovish Fed policymakers, was the latest on Wednesday to say a pause in the hiking cycle was not for discussion and peak rates next year were likely "somewhere between 4.75% and 5.25%" compared with 4.0% right now.

U.S. housing starts numbers out later will give another glimpse at the state of the ailing property sector.

U.S. stock futures were flat ahead of the open.

The euro was knocked further back from this week's 4-month peaks, meantime, amid rising speculation the European Central Bank will downshift its rate rises to a 50 basis point clip next month.

There was better news in the corporate world as German engineering and technology giant Siemens jumped 7.2% after it said factory hardware and software continued to see strong demand.

China stocks fell earlier as tech firms listed in Hong Kong slumped 2.2%, with food delivery firm Meituan down 5.7%. Tencent said it would return capital to shareholders through a dividend distribution of its $20.3 billion stake in Meituan, as its sales fell for a second straight quarter.

Gaming company NetEase plunged 9.1% as Activision Blizzard's game development unit said it would be suspending most Blizzard game services in mainland China.

Reverberations continued around the world from this month's latest implosion in the crypto universe and the failure of the FTX exchange. Major crypto player Genesis Global Capital suspended customer redemptions in its lending business on Wednesday, citing the FTX collapse. Court papers show Sam Bankman-Fried faces legal action, but the embattled FTX founder claims he regrets now his decision to file for bankruptcy and criticized regulators.

Key developments that may provide direction to U.S. markets later on Thursday:

* U.S. Oct housing starts and permits, Nov Philadelphia Fed business sentiment index, Kansas City Fed manufacturing index, weekly jobless claims

* U.S. Treasury auctions 10-year inflation protected securities

* British finance minister Jeremy Hunt announces medium-term fiscal statement; plus new forecasts from Office for Budget Responsibility. Bank of England Chief Economist Huw Pill and BoE policymaker Silvana Tenreyro also speak

* Federal Reserve Board Governor Michelle Bowman, Minneapolis Fed President Neel Kashkari, Atlanta Fed chief Raphael Bostic, Cleveland Fed chief Loretta Mester are all speaking

* US corporate earnings: Macy's, Applied Materials, Palo Alto Networks

(By Mike Dolan, editing by Simon Cameron-Moore mike.dolan@thomsonreuters.com. Twitter: @reutersMikeD)