Dhara Ranasinghe

Sterling and UK government bond prices rallied on Wednesday in whip-sawed trade as Britain's finance minister Rachel Reeves delivered a highly-anticipated budget.

The outlook for bonds, stocks and sterling hinges on Finance Minister Rachel Reeves striking the right balance between fiscal restraint and support for growth.

MSCI's global equities gauge lost ground on Friday and Wall Street had a muted end to the week while U.S. Treasury yields climbed after hawkish Federal Reserve officials trounced on hopes for a December interest rate cut.

British markets were whipped around on Friday, with sterling, government bonds and stocks suffering steep losses as speculation swirled around the UK government's highly-anticipated November 26 budget.

MSCI's global equities index rose slightly on Wednesday while U.S. Treasury yields fell and Wall Street indexes were mixed while investors waited for U.S. Congress to end the federal shutdown and provide greater clarity on the health of the U.S. economy.

Risks to euro zone inflation are balanced and growth is turning out to be stronger than once expected, two European Central Bank policymakers said on Tuesday, reinforcing market expectations for no more rate cuts in the near future.

A gauge of British bank stocks rose in steady markets on Thursday after the Financial Times reported Chancellor Rachel Reeves was set to spare them from a punitive budget tax raid.

Traders are growing gloomy on the outlook for the pound, already at its lowest in months, concerned that a long-awaited budget this month will do little to boost Britain's growth prospects.

Britain's pound touched its lowest point since April on Tuesday after finance minister Rachel Reeves reiterated her commitment to upholding her fiscal rules in her November budget, ahead of a Bank of England interest rate decision later this week.

France's financial markets are riding a roller-coaster, as the country grapples with one of its worst political crises in decades, and while sentiment is improving, the bumpy ride is not over.