Thanks for joining us. Bond markets had their best day in months as the war in Israel pushed investors towards safer assets.
The yield on benchmark 10-year US Treasuries fell 18 basis points to 4.62pc – the most since March – while the two-year bond yield dropped by its most since the end of August.
US bond markets had been closed on Monday for the Columbus Day holiday, meaning that Asian trading overnight was the first chance investors had to put their capital into American debt after the outbreak of the Gaza conflict.
Yields were also boosted by comments from US Federal Reserve officials, which markets interpreted as a sign that interest rates are unlikely to move higher.
Fed Vice Chair Philip Jefferson said Monday that policymakers could “proceed carefully” following the recent rise in Treasury yields, and Fed Bank of Dallas President Lorie Logan said the surge in long-term rates may mean less need for further tightening.
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What happened overnight
Asian shares have climbed after Wall Street advanced on potentially encouraging news about interest rates, which have been dragging markets lower since the summer.
Oil prices fell back slightly after surging Monday following Israel’s declaration of war on Hamas following its surprise attack from the Gaza Strip.
Tokyo’s Nikkei 225 gained 2.2pc to 31,682.71 and the Hang Seng in Hong Kong picked up 1.3pc to 17,740.49.
In Australia, the S&P/ASX 200 rose 1.2pc to 7,053.80. South Korea’s Kospi added 0.4pc for 2,419.77. In Bangkok the SET gained 0.5pc.
On Monday, the S&P 500 gained 0.6pc to 4,335.66, flipping from losses to gains after two Federal Reserve officials suggested interest rates might remain steady at their next policy meeting because a jump in longer-term bond yields may be helping to cool inflation without further market-rattling hikes by the Fed.
The Dow Jones Industrial Average gained 0.6pc to 33,604.65 and the Nasdaq composite climbed 0.4pc to 13,484.24.
Oil prices, which had climbed Monday on worries about the violence in the Middle East, fell back.
