UK and European equities traded with a firmer tone, supported by selective buying in defensives and renewed corporate activity, although sentiment remained constrained by elevated government bond yields and political risk in the UK. Investors also remained focused on the European data calendar, with preliminary eurozone growth and industrial production releases due alongside German wholesale price figures.

US equity futures pointed to a mixed opening, with technology and growth areas showing relative resilience while the Dow lagged. The main focus for investors was the latest producer price inflation reading, which reinforced concerns that price pressures remain sticky and could keep the Federal Reserve cautious for longer. Treasury yields stayed elevated following the inflation data, while the dollar was supported by the combination of higher yields and geopolitical uncertainty.

Asia-Pacific markets were generally stronger, with Japanese and mainland Chinese equities advancing as investors took a more constructive view of regional growth prospects and global risk appetite. The tone was helped by steady buying in cyclical and technology-linked areas, although the region remained sensitive to developments in US rates, oil prices and geopolitical tensions affecting trade and energy flows.

Oil markets remained firm as supply concerns dominated the session. The International Energy Agency warned that global inventories are falling at an unusually rapid pace, with disruption linked to the conflict involving Iran keeping the market alert to further upside risks. While some demand forecasts have been moderated, the immediate focus remains on supply security, shipping routes and the inflationary impact of higher energy costs.

Gold edged higher as investors maintained demand for defensive assets against a backdrop of geopolitical uncertainty, elevated inflation concerns and volatility in bond markets. The metal continued to benefit from its safe-haven profile, although higher real yields and a firmer dollar limited the scale of the move.

Vistry weighed on the housebuilding sector after warning that profit would come under pressure as discounted sales, buyer incentives and weaker market conditions eroded margins. The company also signalled a more cautious approach to construction activity and capital allocation, including action to protect cash flow and reduce debt. The update reinforced investor concerns around affordability, build-cost inflation and the