In European Equity Markets indices fell to their lowest levels since late 2016 on Tuesday, as diplomatic tensions in Saudi Arabia, concerns over Italy’s budget and earnings all depressed market sentiment. The pan-European Stoxx 600 was down 1.49 percent by the end of trade, slipping to its lowest level in almost two years. Europe’s technology stocks were among the worst performers, falling by over 3.6 percent amid earnings news. Shares of Austrian chipmaker AMS fell almost 27 percent after the company’s outlook for the final three months of the year failed to convince investors.

In Currency Markets sterling gained half a percent versus the dollar and euro on Tuesday after Ireland’s RTE News reported that the European Union may offer Britain a UK-wide customs union. The pound rose from just below $1.30 to as high as $1.3044 after the report, up 0.6 percent on the day. It also jumped versus the euro to as much as 87.995 pence before easing back to 88.1 pence. Reuters had reported on Monday that EU negotiators were looking at ways to promise Britain a customs deal.

In Commodities Markets oil prices fell nearly 3 percent to more than one-month lows on Tuesday after Saudi Arabia said it could supply more crude quickly if needed, easing concerns ahead of U.S. sanctions on Iran and as U.S. equity markets sold off. Brent crude futures fell 2.8 percent, or $2.27, to $77.56 a barrel after falling to $77.50, the lowest since Sept. 18. U.S. crude fell $1.98, or 2.9 percent, to $67.38 a barrel, after hitting a session low of $67.26, the lowest level since Sept. 7.

In US Equity Markets indices fell on Tuesday as disappointing forecasts from industrial bellwethers Caterpillar and 3M triggered alarm bells over corporate growth and added to concerns ranging from China’s slowdown to Saudi Arabia’s diplomatic isolation. The S&P 500 was down 1.64 percent, at 2,710.65 and the Nasdaq Composite was down 2.03 percent, at 7,317.33. McDonald’s rose 5.8 percent after it beat estimates for quarterly same-store sales as strong demand in international markets.

In Bond Markets Italian bond yields rose sharply on Tuesday, reversing falls earlier in the session, as the European Commission rejected Italy’s draft budget and gave Rome three weeks to come up with a revised version. Italy’s two-year borrowing costs rose 12 basis points to hit the day’s high of 1.58 percent, reversing earlier falls, before easing back a touch to around 1.53 percent. Benchmark 10-year yields rose to 3.586 percent before dropping slightly to 3.55 percent, still up eight bps on the day.