London - Stock markets mainly rose on Tuesday as traders reacted largely to the outlook for US interest rates.
The euro pulled back versus the dollar, which had risen on Tuesday on the prospect of a sharp rise in American borrowing costs according to analysts.
While the corporate earnings season is maintaining traders' attention, Friday's upcoming release of US economic growth data is a key marker with a strong reading likely to reinforce opinions that borrowing costs will go up.
An improving US economy, expectations that its inflation will continue to rise on the back of an oil price rally and President Donald Trump's tax cuts have lifted the yield of benchmark 10-year Treasuries, or American government bonds, close to three percent and near its highest level since 2014.
Higher yields are a signal interest rates could rise and could weigh on markets as traders shift from equities to safer bond investments.
"Without question (the) US GDP data will be crucial for an extension of the current dollar move as US economic strength in the face of synchronised economic slowdowns in both China and Europe are playing into the resurgent US dollar hand," said Stephen Innes, head of Asia-Pacific trade at traders Oanda.
Confidence among business leaders in Europe's biggest economy Germany fell back in April, a closely-watched survey showed Tuesday, as executives responded to a broader clouding-over of the global economic outlook.
The Ifo institute's closely-watched barometer lost 1.2 points month-on-month, for a reading of 102.1.
Elsewhere on Tuesday, shares of technology firms struggled on after Apple suffered another sell-off on Monday on worries about the key smartphone sector.
Russian aluminium giant Rusal meanwhile soared more than 40% after the US Treasury said it would consider lifting sanctions if tycoon Oleg Deripaska gives up control of the company.
In oil markets, both main contracts built on Monday's gains to hold at peaks not seen since late 2014, with ongoing unrest between crude kingpin Saudi Arabia and Yemen rebels providing support.
Adding to the positive outlook for crude is improving demand in the United States and geopolitical tensions.
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