Analysts at Danske Bank offer a brief overview of the previous day's trading action in the US equity markets and a fall in the US Treasury bond yields, led by dovish remarks from Fed officials.

Key Quotes:

“Risk sentiment improved overnight as dovish comments from Fed members fuelled a strong rally in US bonds in Asia after the US market was closed overnight. Fed Vice Chair Philip Jefferson said Monday officials could "proceed carefully" following the recent rise in Treasury yields. Fed member Lorie Logan from Fed Bank of Dallas stated the surge in long-term rates may mean less need for further tightening. Also risk markets calmed down from the initial uncertainty in the Middle East as there are not yet signs of a broader escalation of the conflict.”

“Global equities ended yesterday higher as investors to a large extent concluded that the Middle East conflict would not end up having a material impact on the global economy. US cash bond trading was closed yesterday for Columbus Day holiday, but equity investors took notice of the futures market indicating the massive drop we see in yields this morning as cash bond trading reopened. Hence, bond markets ultimately had a bigger impact on equity markets yesterday than the conflict in the Middle East.”