In European Equity Markets shares fell back on Tuesday as global markets took a risk-averse turn, with cyclical sectors including mining and financials suffering the sharpest losses. Europe’s STOXX 600 ended down 0.9 percent, suffering its biggest one-day loss since early November. Basic resources stocks fell 1.6 percent, the biggest sectoral fallers as metals prices declined, dented by the strengthening dollar. Anglo American was among the worst-performing. Europe’s banking stocks also fell 1.3 percent while financial services stocks dropped 0.8 percent. Loomis fell 7.6 percent after the Swedish support services firm reported fourth-quarter profit missed forecasts. Outside of results-driven moves, Telecom Italia  rose 3.41 percent after sources said it had proposed to separate its network assets. Swedish engineering group Alfa Laval rose 2.5 percent after its fourth quarter order intake far exceeded market forecasts.

In Currency Markets the US dollar fell on Tuesday, reversing its gains from the day before, as traders awaited a Federal Reserve meeting announcement on Wednesday, while major currencies such as the euro and the Japanese yen strengthened against the greenback. After six straight weekly declines, the dollar index was on track to fall about 3.4 percent for the month, which would be its biggest monthly fall since March 2016. However, the dollar was last down 0.17 percent against a basket of six major currencies at 89.154, having pulled up from a low of around 88.43 set last week, its weakest level since December 2014. The euro gained 0.23 percent to $1.2409, still a way from a three-year high of $1.2536 touched last week. Sterling, a currency highly correlated to risk-on sentiment, briefly fell below the $1.40 line for the first time in a week before climbing back above the level and last trading at $1.4125. The Japanese yen strengthened 0.19 percent versus the greenback at 108.76 per dollar.

In Commodities Markets oil prices fell for a second day on Tuesday, driven by ongoing evidence of rising U.S. crude output, while wary investors sold off stocks, bonds and commodities. Brent crude futures were down 90 cents, or 1.3 percent, at $68.56 a barrel after touching a session low of $68.40. U.S. West Texas Intermediate futures were trading $1.28, or nearly 2 percent, lower at $64.28 a barrel. Expectations for U.S. crude inventories to rise for the first time in 11 weeks may also be keeping oil under pressure, according to a preliminary poll by Reuters on Monday. U.S. production is already on par with that of Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC). Only Russia produces more, averaging 10.98 million barrels per day (bpd) in 2017. Natural gas futures jumped 2.5 percent, bouncing well off the prior session’s lows, on bets of cold weather to come in February, which should boost demand for the heating fuel.

In US Equity Markets stocks fell for a second straight day on Tuesday, with the Dow Jones Industrial Average falling as much as 352 points, pushed by a rise in bond yields and a decline in healthcare companies.  Shares of healthcare-related companies fell after Amazon.com, Berkshire Hathaway and JPMorgan said they plan to form a venture aimed at lowering healthcare costs for their U.S. employees. The S&P health sector declined 1.6 percent, the most among the 11 major sectors. Health insurer UnitedHealth fell 4.3 percent, the most among Dow components, while Cigna’s 6.4 percent fall was the biggest on the S&P 500. The S&P 500 was down 20.43 points, or 0.71 percent, at 2,833.10 and the Nasdaq Composite was down 42.70 points, or 0.57 percent, at 7,423.81. MetLife fell 8.7 percent after saying the U.S. financial regulator is looking into the insurer’s failure to pay some workers’ pensions.

In Bond Markets borrowing costs across the euro zone came off multi-year highs on Tuesday after weak German inflation data supported a view that the European Central Bank would take a cautious approach to unwinding its massive monetary stimulus. In a sign that price pressures remain moderate even in booming Germany, the euro zone’s largest economy, consumer price inflation, harmonised to compare with other euro zone countries, slowed to 1.4 percent on the year in January. That was below the consensus forecast in a Reuters poll of analysts who had predicted an unchanged reading of 1.6 percent and followed mixed inflation data earlier from German regions. Ten-year bond yields fell 1-3 basis points across the board on Tuesday, but faced some upward pressure in afternoon trade as U.S. Treasury yields climbed to fresh highs. After going positive for the first time since late 2015 on Monday, five-year German bond yields slipped back into negative territory.