A look at the day ahead in European and global markets from

Gregor Stuart Hunter:

It's make-or-break time for Britain's finance minister Rachel

Reeves as she unveils later today a budget expected to contain

tens of billions of pounds of new tax increases.

Sterling is up 0.2% at $1.3193 in Asian trading, rising for

a fifth consecutive day ahead of her speech, due to begin at

1230 GMT.

In Japan, the yen rallied 0.2% against the U.S. dollar as

sources told Reuters that the Bank of Japan is preparing markets

for a possible interest rate hike as soon as next month,

shifting the central bank onto a hawkish footing after a meeting

last week between new Prime Minister Sanae Takaichi and BOJ

Governor Kazuo Ueda.

Takaichi's high approval ratings are prompting Japanese

opposition parties to ramp up preparations for snap elections,

the Yomiuri newspaper reported on Wednesday.

The kiwi dollar surged 1.2% after the Reserve Bank of New

Zealand cut interest rates 25 basis points to 2.25%, but removed

its dovish guidance, signalling an end to the central bank's

easing cycle. And the Australian dollar jumped 0.5% after a

hotter-than-expected inflation report reinforced bets that the

Reserve Bank of Australia is also done with rate cuts for now.

Oil markets have been choppy, after Ukrainian President

Volodymyr Zelenskiy signalled he was ready to advance a

U.S.-backed peace plan, paving the way for a relaxation of

sanctions on Russian energy and additional supplies, sending oil

prices tumbling to a five-week low on Tuesday.

But Brent crude futures rebounded 0.4% to $62.72 after U.S.

President Donald Trump backed away from a Thursday deadline for

Ukraine to agree. Trump also shrugged off a Bloomberg News

report that U.S. negotiator Steve Witkoff coached the Russians

on how to approach him on the topic.

None of that confusion and volatility troubled equity

markets, which enjoyed a broad rebound following cues from Wall

Street after the S&P 500 rose for a third consecutive

day.

On Wednesday, MSCI's broadest gauge of shares outside of

Japan jumped 1% as traders firmed up

expectations the Federal Reserve will cut interest rates next

month, while the Nikkei 225 surged 2% on optimism about

corporate earnings.

But Hong Kong and China lagged gains, with the Hang Seng

Index up 0.5% after earnings from AI front-runner Alibaba ( BABA )

that beat estimates, but still left shares down 1.1%

as the e-commerce company underwhelmed investors with its Q4

guidance and said it would decrease spending on its instant

commerce business - prompting a 6% gain for rival Meituan ( MPNGF )

.

Key developments that could influence markets on Wednesday:

UK: Autumn budget

Debt auctions:

Germany: 10-year government debt