European stock markets strengthened ahead of the US midterm elections as expectations of a possible resumption of negotiations between Iran and the United States weighed heavily on energy prices and supported government bonds.
Milan gained 0.5%, Madrid rose 0.8%, Paris added 0.3% and Frankfurt advanced 0.2%. London was the only major European market slightly below parity, down 0.1%. US stock futures also moved higher, with Nasdaq futures up 0.8% and Dow Jones futures gaining 0.7%.
Government bond prices rose as yields declined. Treasury yields fell by three basis points to 4.9%, while Italian 10-year BTP yields dropped by more than seven basis points to 4.43%. The spread between Italian and German bonds narrowed by five basis points to 113 points.
Energy markets saw sharper losses. Reports indicated that US President Donald Trump was open to giving diplomacy more room, while Iran's Supreme Leader Mojtaba Khamenei had granted the government certain powers to pursue the matter. West Texas Intermediate crude fell 6.3% to $97.5 per barrel, Brent declined 6% to $106.6, and natural gas dropped 8.5% to €95 per megawatt-hour.
Sources: ANSA Economia.