European stocks extended gains Tuesday while global equity value hit yet another all-time high as investors extend the so-called reflation trade amid a surging U.S. dollar and higher government bond yields linked to optimism that President Donald Trump's tax proposals will find support from lawmakers.

Early indications from U.S. equity futures suggest are also pointing to another record setting day for Wall Street after all three benchmarks closed at all-time highs again last night. The Dow Jones Industrial Average is set for a 36-point gain, according to futures prices, while the broader S&P 500 is looking to add around 2.5 points, or 0.1%, at the opening bell.

The MSCI All Country World Share index bumped to its 42nd record high of the year in the early European session, taking the value of global stocks above the nominal dollar value of global GDP for the third time this year. In Europe, the Stoxx 600 benchmark, the broadest measure of regional share prices, rose 0.5% to a three-and-a-half month high of 390.10 points in the opening two hours of trading, thanks to solid gains for the CAC-40 in France, which added around 0.3% to Monday's close. Germany's DAX index is closed for the country's Unity Day holiday.

Spain's benchmark IBEX 35 index of the country's biggest stocks has stabilised Tuesday after a 1.2% slump yesterday as investors moved cash to safer markets around the region ahead of a general strike in Catalonia, the country's richest and most important region, following its disputed independence referendum Sunday.

At the same time, the extra yield, or spread, that investors demand to hold triple-B rated 10-year Spanish government bonds instead of top-rated German bunds rose to a four-month high of 1.23%.

Britain's FTSE 100, however, was essentially unchanged by 09:30 London time after advancing nearly 1% yesterday thanks in part to a weaker pound and strong gains for domestic homebuilders amid speculation of new support for first time buyers from the Conservative government.

Overnight in Asia, Japan's Nikkei 225 added more than 200 points to close at a two-year high 20,614.07 points thanks to a notably weaker yen and speculation of further fiscal support after this's month's national election. The broadest measure of regional stocks, the MSCI Asia ex-Japan index, was little-changed heading into the start of the European session, with volumes and headlines muted owing to the Golden Week holiday celebrations in China.

The dollar was once again on the rise in the Asia session and into the start of European trading, rising 0.37% against a basket of six global currencies to trade at 93.63, the highest since early August, while benchmark 10-year U.S. Treasury note yields hit a 3-month high of 2.37% before paring that move to around 2.36%.

Global oil markets extended yesterday's sharp declines into the European session, with West Texas Intermediate crude futures for November delivery marked 0.68% lower at $50.53 per barrel after Monday's 2.1% decline. Brent contracts for December delivery, the global benchmark, were seen 0.1% lower at $56.08 after a 1.2% slump by the end of trading in New York yesterday as investors dumped commodities in the face of rising dollar yields and the anticipation of weaker oil demand into the final three months of the year.

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