In European Equity Markets the pan-European Stoxx 600 closed around 0.1 percent higher Tuesday, with most major European bourses in negative territory. Italian equity investors were the big losers as uncertainty over the country’s future government loomed. The FTSE MIB in Milan closed down by 1.67 percent. Shire finished near the top of the European benchmark, gaining almost 5 percent. Japan’s Takeda Pharmaceutical has struck a deal to buy the Irish drug-maker for £46 billion. Europe’s travel and leisure stocks were one of the few sectoral gainers, up 0.3 percent amid earnings news. British bookmaker William Hill was a decent performer after it posted its latest figures.

In Currency Markets the US dollar advanced on Tuesday to its highest level of 2018 against a basket of currencies on safe-haven buying, as investors worried about the fate of the Iran nuclear deal and political turmoil in Italy. Recent data showing Europe’s economic growth was slowing caused traders to cut bullish bets on euro and to scale back their outlook for European interest rate hikes in 2019. The pound declined to $1.3485, its lowest since Jan. 11, Bank of England policy makers meet on Thursday, and are expected to leave interest rates unchanged. Among commodity-linked currencies, the Australian dollar fell 1 percent to $0.7441 after touching an 11-month low.

In Commodities Markets oil prices fell as much as 3.5 percent on Tuesday as traders sold off on a CNN report that sparked doubts about whether U.S. President Donald Trump would impose sanctions on Iran as quickly as the market had expected, a decision that would reduce global crude supplies and feed tensions in the Middle East. Prices fell sharply moments after CNN reported that Trump was expected to impose sanctions on Iran but may also allow for “a grace period that may offer the deal’s proponents an opening to negotiate.” Brent crude futures were down 2 percent at $74.61 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 2.5 percent $68.95.

In US Equity Markets indices edged lower on Tuesday, weighed down by technology and consumer discretionary stocks, while investors awaited President Donald Trump’s decision on the Iran nuclear deal. The S&P 500 was down 0.33 percent, at 2,663.68 and the Nasdaq Composite was down 0.40 percent, at 7,236.22. The S&P consumer discretionary index was down 0.4 percent. Citigroup advanced 2.2 percent after activist investor ValueAct invested $1.2 billion in the bank, citing its low risk and reliable revenue. The stock’s gain helped the S&P financial index to be the only gainer among the major 11 indexes.

In Bond Markets Italian government bond yields rose sharply on Tuesday, lifting southern European peers, as the possibility of an early Italian election increased with the country’s largest anti-establishment parties polling strongly. President Sergio Mattarella called on Monday for Italy’s bickering parties to rally behind a “neutral government”, but Italy’s two largest parties, the far-right League and anti-establishment 5-Star Movement, rapidly came out against the proposal. Italy’s 10-year bond yield jumped 10 bps to a six-week high at 1.867 percent and was set for its biggest daily jump since early January. Other Southern European government bond yields were also higher by 4-5 bps.