A look at the day ahead in European and global markets from Rae

Wee

The relief rally brought about by U.S. President Donald

Trump's postponement of a threat to bomb Iran's power grid

didn't even last a day.

With Tehran denying it had engaged in negotiations with

Washington and global energy supply still crippled, risk

sentiment quickly turned sour in Asia on Tuesday and Brent crude

futures swiftly bounced back above $100 a barrel.

Asian shares rebounded slightly in a catch-up rally to their

global counterparts from overnight, but U.S. and European

futures fell in choppy trade.

The dollar clawed back its losses, while U.S. Treasury

yields resumed their climb.

Even as Trump added five days to his Saturday ultimatum for

Iran to reopen the Strait of Hormuz within 48 hours, the

situation remains tense and there's been little sign of an

imminent end to the Middle East conflict.

Iran launched multiple waves of missiles at Israel, the

Israeli military said, triggering air raid sirens in parts of

the country including Tel Aviv, where blasts from interceptions

were heard.

The prolonged energy shock has also left governments around

the world scrambling to secure supplies and finding ways to cut

back on demand.

Japan plans to start releasing oil from joint stockpiles

held by producing nations in the country by the end of March,

Prime Minister Sanae Takaichi said in a post on X on Tuesday.

South Korean President Lee Jae Myung called for a nationwide

energy-saving campaign, saying public institutions would cut

back on their use of passenger cars.

Meanwhile, traders have offered Iranian oil to Indian

refiners at a premium to ICE Brent after Washington temporarily

removed sanctions to ease the energy crisis, three industry

sources said.

Elsewhere in markets, data on Tuesday showed Japan's core

consumer inflation slowed below the central bank's 2% target in

February for the first time in nearly four years, making the

Bank of Japan's communication more difficult as it seeks to

raise still-low borrowing costs.

Flash PMI readings for the euro zone, the UK and the U.S.

are also due later on Tuesday.

Key developments that could influence markets on Tuesday:

- UK, euro zone, U.S. flash PMIs (March)

- ECB's Pedro Machado, Piero Cipollone and Philip Lane speak

at separate events

- Fed's Barr speaks

(Editing by Jamie Freed)