US stock markets and government bonds rally while dollar falls after Democrats secure Congress – as it happened

European shares are powering ahead! The FTSE 100 index in London has surged 207 points to 10,845, a near-2% gain.

The Dax in Frankfurt is up by a similar amount, while the French and Italian markets have jumped more than 2% and the Spanish index has soared 3.2%.

Banking and clean energy stocks were among the top gainers, while defence stocks fell sharply both sides of the Atlantic (including in US pre-market trading), as Trump’s $1.5 trillion budget request for the Pentagon is likely to face far more scrutiny in Congress. The UK’s BAE Systems , which relies on the US for almost half its revenues, fell almost 6% earlier and is now down nearly 2%.

Wall Street is expected to open higher in less than half an hour, after Democrats secured sweeping victories in the midterm elections and secured control of US Congress Investors are hoping that it will be able to limit Donald Trump ’s scope for abrupt policy shifts, and keep a lid on government spending and borrowing.

The yield, or interest rate on the benchmark 10-year UK gilt is down 6 basis points at 5.18%, while the corresponding US Treasury yield has fallen 5.1bps to 4.91%.

Oil prices are down sharply , easing inflation fears, with Brent crude falling towards $100 a barrel. It is currently trading $2.72 a barrel lower at $100.87 a barrel, a 2.67% decline, as markets await Washington’s next move against Iran.

Eurozone yields nudged higher after inflation in the eurozone hit 4% last month, the highest in three years, and up from 3.8% in September.

The core inflation figure, which strips out volatile food and energy prices, remained at 2.5%, also in line with economists’ expectations, according to the flash estimate from the eurozone’s statistics office Eurostat.

The dollar slid 0.5% against a basket of major currencies, driven by expectations of more regulation of the booming AI sector, which could lead to slower economic growth.

Spot gold , seen as a safe haven investment, jumped 2.9% to $4,041 an ounce.