Asian markets mixed amid fears of an OPEC oil cut

Shares in Australia .AXJO and South Korea .KS11 also dropped about 0.3 percent, though MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS as flat as a weaker dollar offset losses in local share prices.

The dollar index dipped 0.08 per cent.

“The economic and equity market backdrop was already improving before the election”. On Tuesday, the 10-year USA yield stood at 2.312 percent, down from its US close on Monday of 2.320 percent.

Fillon, a former French prime minister, is the favourite to become president, with a flash opinion poll suggesting he would easily beat far-right National Front leader Marine Le Pen in a second round run-off. Worries over Italy’s referendum loom.

CLEARANCE: Consumer discretionary stocks were among the hardest hit.

Asian stocks are trading mostly lower in cautious trade, although Chinese shares extended recent gains on optimism that the country’s economic growth is possibly bottoming out.

If a deal can not be agreed upon on Wednesday, some analysts expect a sharp correction lower, potentially going as low as +$35 per barrel on big inventories and supply overhang issues. This helped push the STOXX Europe 600 Index up 0.16 percent in early trades, though it heading back towards parity by 1145 GMT.

London’s benchmark share index opened lower, with banks and oil companies among the main fallers.

Amazon was down 0.3 percent at $778 after Citigroup reduced its price target on the stock.

Later on Tuesday, investors will look to USA third-quarter gross domestic product data as well as readings on consumer confidence and consumption for trading cues. “But assuming that OPEC does not agree, for the next few months it does set up for a lower oil price [in the] high 30s to low 40s range”.

USA crude last rose 2.5 per cent to $47.23 a barrel and Brent traded at $48.42, up 2.5 per cent on the day.

On the other hand, some commodities gained sharply on hopes of strong demand for property and infrastructure investment in China and the United States. “The dollar and interest rates move in tandem with each other on expectations that in six months’ time and beyond, USA growth will be stronger, and that will deliver a better environment for the US economy and probably higher USA interest rates”. US gold futures added 1.2 percent to $1,192.60 an ounce.

EUR/CHF trades atop of €1.0748, little changed from Friday’s close.

As lower oil prices reduce inflationary pressure, they sapped momentum for a sell-off in U.S. Treasuries and a rally in the dollar, the market’s favorite play since the U.S. election.

“The sell-off has been quite dramatic”, said Subadra Rajappa, head of USA rates strategy at Societe Generale in NY. Miners failed to hold up a similar rally: After surging 12 percent since the US election, Stoxx 600 commodity producers fell for the second time in three days.

Having lost more than half their value over the a year ago, Italian banking stocks fell 3 per cent to their lowest in nearly two months as Italian government bonds also underperformed the wider rally in fixed income.