Brent crude oil fell to a one-month low — under $113 a barrel — on Tuesday as inconclusive Italian election results revived investor concerns about instability in the euro zone and threatened the outlook for fuel demand.
Gold rose 1.3 percent, its biggest one-day gain in three months, as Federal Reserve Chairman Ben Bernanke's defense of U.S. bond-buying stimulus boosted bullion's inflation-hedge appeal.
U.S. Treasurys briefly extended their losses on Tuesday on news of an unexpectedly big jump in U.S. consumer confidence and single-family home sales in January.
Euro zone shares sank to three month lows on Tuesday after an Italian election stalemate renewed concerns about the future of the euro zone.
U.S. stock index futures rose across the board following the upbeat S&P/Case-Shiller home price report and a day after the Dow and S&P 500 logged their worst one-day performance in 2013 amid worries about Italy's election result.
Asian stock markets tumbled on Tuesday, with Japan leading losses after a general election in Italy pointed to deadlock in parliament and raised fears of a new crisis in the euro zone.
As the spotlight is thrown back on the euro zone crisis amid a political stalemate in Italy, investors are scrambling for beaten-down safe havens, scooping up gold and the yen.
An inconclusive election result in Italy that raises the specter of policy deadlock in the euro zone's third largest economy, appears to have stopped a stellar euro rally and could mark a turnaround in the currency's recent good fortunes, analysts said.
Fed Chairman Ben Bernanke is expected to provide soothing words about the Fed's easy money policies, but markets may react more to new bearish concerns out of Europe.
The U.S. dollar and euro fell sharply in late afternoon trade as uncertainty about Italy's elections and sharp losses in stocks led investors to unwind trades funded in yen.
Gold rose on Monday, as euro zone fears related to an uncertain outcome for Italy's election lifted safe-haven buying.
U.S. Treasury debt prices rose and benchmark yields dipped to the lowest in a month on Monday, as Italian exit polls reflected uncertainty over whether the country would be able to form a stable government.
Brent crude rose after official Chinese data indicated strong demand in the world's second-largest oil consumer, though prices pared early gains as uncertainty surrounding Italian election results weighed on the euro and spooked markets.
Uncertainty over the Italian election outcome dragged European indexes off their highs on concern that an unclear outcome could hamper the country's effort to implement economic reforms.
U.S. stock index futures were higher Monday, boosted by market gains overseas, lifted by optimism over the Italian elections and prospects for looser Japanese monetary policy.
Hopes of a victory for a pro-reform Italian government helped fuel a stock market rally and support government bonds on Monday in the final stages of voting in the general election.
Benchmark oil prices are set to weaken further this week though losses may be limited if U.S. Federal Reserve Chairman Ben Bernanke defends the central bank's stimulus efforts this week at his semi-annual testimony to Congress.
Reports that Japan's government will likely nominate Haruhiko Kurodo, an advocate of aggressive monetary easing, as the next Bank of Japan (BOJ) chief, do not come as a surprise.
Most Asian stock markets rallied on Monday, led by a 2.4 percent jump in Japanese shares after the yen slumped on news the government looks set to nominate Haruhiko Kuroda, the president of the Asian Development Bank and advocate of aggressive monetary easing, as the next Bank of Japan governor.
Washington's budget debate could stir up new anxieties as markets head into March, even with expected reassurances about Fed policy from Fed Chairman Ben Bernanke in the week ahead. Europe could also come back into play in the coming week, as currency traders are focused on the outcome of the Italian election.
European shares were flat on Friday as talks over the "fiscal cliff" stalled.
European shares closed lower on Wednesday for a third consecutive session, with resurging worries about the global economic outlook undermining investor sentiment.
Standard & Poor's decision to cut Spain's credit rating to one notch above junk status is weighing on markets.
Asian shares dipped on Tuesday following losses on Wall Street after U.S. manufacturing activity hit a three-year low in November.
As the Chinese boom slows Hermes, Remy and other posh names are still going full throttle in Asia.
The worst US drought in over 50 years is pushing commodity prices to record highs.