Dhara Ranasinghe

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.

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.

MSCI's global equities gauge rose almost 1% on Monday, regaining some of the ground lost in Friday's sell-off after U.S. President Donald Trump softened his tone on the U.S.-China trade war, but safe-haven gold hit fresh record highs in a sign that uncertainty remained high.

The U.S. dollar, long renowned for its strength, has been weakened by President Donald Trump’s stiff tariffs, his attacks on the Federal Reserve and his distancing from allies and global institutions.

The Chinese yuan and Australian dollar increased their share in global currency reserves in the second quarter, data from the International Monetary Fund shows, while the U.S. dollar and euro lost a little ground, adjusted for exchange rate swings.

Caution took hold of world markets on Tuesday, with the dollar and equities gyrating in choppy trade and gold briefly hitting a record high on concern a likely U.S. government shutdown could delay key jobs data.

French Prime Minister Francois Bayrou lost a confidence vote on Monday, plunging the euro zone's second largest economy deeper into political crisis.

Britain's 30-year borrowing costs rose to their highest levels since 1998 and sterling slid over 1.5% on Tuesday, highlighting growing investor anxiety about the UK's ability to keep its finances under control.

Signals from the world’s biggest bond markets point to more volatility as Germany, Japan and the U.S. prepare to sell long-dated bonds in early September - adding pressure to an already bruising year.

The prospect that France's minority government could collapse soon triggered a sharp selloff in French stocks and bonds on Tuesday, pushing political risks from the euro zone's second biggest economy back to the forefront of investors' minds.

Long-dated U.S. Treasuries and stock futures slipped on Tuesday after President Donald Trump said he was firing a Federal Reserve governor, an unprecedented move that fuelled investor concerns about the Fed's independence.

Standard Chartered shares rose 3% on Friday after what the bank said was a favourable ruling by the U.S. Department of Justice in a long running civil case.

A look at the day ahead in U.S. and global markets by Dhara Ranasinghe, European Financial Markets Editor

Defence stocks and energy markets are likely to be in focus this week, as European leaders rushed to back Ukraine in talks with U.S. President Donald Trump that may pressure Kyiv to accept a peace deal favouring Russia.

The opinions expressed here are those of Dhara Ranasinghe, Editor, Financial Markets, EMEA.

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