European equities closed broadly higher on Tuesday as investors embraced a stronger risk-on tone fueled by hopes that progress toward reopening the Strait of Hormuz could ease tensions in the Middle East and restore a key global energy supply route.
The improving geopolitical backdrop helped send crude oil sharply lower, pushed sovereign bond yields down across Europe and the U.S., and supported another strong session for global equities
Reports suggesting negotiations involving Iran and Oman are advancing toward a framework to resume commercial shipping through the Strait added to the optimism, although key details still need to be resolved. European Indices Italy (FTSE MIB)***:+1.26% to 53,540.51 Germany (DAX)***:+0.77% to 26,202.36 France (CAC 40)***:+0.61% to 8,666.64 Spain (IBEX 35)***:+0.21% to 20,023.61 United Kingdom (FTSE 100):+0.20% to 10,879.37 *** Reached new record intraday highs today In the European debt market, lower oil prices eased inflation concerns, helping drive yields lower across Europe’s major debt markets. Germany 10-year: 3.109% (-4.1 bps) France 10-year: 3.883% (-5.3 bps) UK 10-year: 4.900% (-5.4 bps) Spain 10-year: 3.538% (-5.6 bps) Italy 10-year: 3.863% (-7.5 bps) Switzerland 10-year: 0.374% (-2.7 bps) U.S.
Treasury yields are also drove sharply lower: 2-year:4.196% (-6.0 bps) 5-year:4.331% (-6.7 bps) 10-year:4.627% (-5.7 bps) 30-year:5.191% (-3.8 bps) The energy market is leading today’s risk-on move. WTI Crude:$76.02, $-4.31 or -5.36%. The low has reached $75.16 Gold:$4,084.96, +$29 or +0.75% Silver:$59.68, +$1.50 for +2.60% Bitcoin:$63,967, +0.80% As London traders head for the exits, Wall Street remains firmly in control with the S&P and Dow on pace for record closes.