US futures were little changed after ending Monday’s cash session higher.
Oil prices meanwhile edged higher on Tuesday after sliding 10% in the previous session. Brent crude futures were up 1% at $100.94 a barrel, while US crude rose 1.9% to $89.84.Still, movement was highly volatile as war in the Middle East dragged on and the prospect of higher-for-longer energy prices lingered.
“Markets are not out of the woods,” said Chris Weston, head of research at Pepperstone.
“Price action could remain choppy into Friday’s revised deadline… The key question is whether participants see this as a genuine extension that brings a deal closer, or simply a delay that prolongs uncertainty.”
Yields on US Treasuries steadied on Tuesday after a sharp fall overnight, in line with a decline in global bond yields as investors trimmed bets of aggressive interest rate increases by major central banks this year.
The two-year yield was little changed at 3.8498%, having fallen more than 6 basis points in the previous session. The benchmark 10-year yield was last at 4.3400%.
While traders have priced out the small chance that the US Federal Reserve could hike this year, they still expect rates to be left on hold.The Bank of England is now seen raising rates just twice this year, compared to four previously , while market expectations for hikes from the European Central Bank have also been pared back .
In currencies, the US dollar was on the back foot after falling on Monday, as a pick up in risk sentiment reduced demand for the safe haven currency.
The euro last traded at $1.1603, having risen 0.4% overnight, while sterling held near Monday’s two-week top and was last at $1.3420.
Against the yen , the dollar was up 0.04% at 158.54.
Data on Tuesday showed Japan’s core consumer inflation rate hit 1.6% in February to slide below the Bank of Japan’s 2% target for the first time in nearly four years, complicating the bank’s efforts to justify further interest rate hikes.
Spot gold was up 0.6% at $4,431.65 an ounce.
With inputs from Reuters
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