News of an agreement to suspend Iran's nuclear program was cited as the main catalyst for financial markets.
Last night also featured some disappointing US economic data (see below for more details). The easing tensions in the Middle East however, boosted sentiment within equity markets.
European shares rose, as did US stocks earlier in the session. The S&P500 initially rose to a new record high, but then retreated later on.
US treasuries rose (yields fell) on weaker than expected housing and manufacturing data. While the signs of weakness within the US housing market raise the prospect that the first move for tapering would be later rather than sooner, there remains considerable uncertainty over next few months.
Key data will continue to be indicators on the labour market.
The Iranian deal helped lift the US dollar index, and saw the yen (vs US dollar) weaken to a six-month low.
The euro was also under downward pressure after ECB Governing Council member Hansson said that there was more room to cut interest rates.
The Australian dollar was largely unchanged at around 91.6 US cents, although it dipped to an intraday low of 91.2 US cents overnight.
Event risk today includes a speech by RBA Governor Lowe this morning.
There is some risk that this will be taken as another opportunity to talk down the Australian dollar. In the medium term, the key driver for the Australian dollar will continue to be the outlook for the Federal Reserve's quantitative easing program.
Oil prices initially fell sharply on the deal with Iran, but then partially rebounded on the realization that Iranian oil exports will not increase for a few months. Gold and copper prices rose overnight.
No data was released yesterday.
UK banks issued 42.8k new mortgages in October, according to BBA data which covers about 70% of the market.
This was down a little from 43.2k in September, the first fall since February.
However, 52% more mortgages were issued in October compared to June 2012, when the subsidies for lenders, later extended to include buyer subsidies, were introduced by the Treasury/Bank of England.
US pending home sales fell -0.6% in October, and have now fallen for 5 consecutive months.
Sales have now fallen 8.3% since May corresponding to the rise in mortgage rates as a result of expectations the Fed would begin tapering.
The rate on 30-year fixed mortgages is around 95 basis points higher since early May.
The Dallas Fed factory index fell from 3.6 in October to 1.9 in November, the third weakest reading for the year so far.
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