Asian markets saw a strong rally on Monday, with U.S. equity futures also pointing higher as the dollar retreated against its rivals and bond yields eased. The MSCI Asia-Pacific index climbed 1.6%, while S&P 500 futures rose 0.5%, reaching near-record highs. The market’s optimism was fueled by the appointment of Scott Bessent as the next U.S. Treasury secretary, with investors expressing confidence in his market-friendly approach.
Bessent, a well-regarded fund manager with a background working alongside prominent investors like George Soros and Jim Chanos, was seen as a stable and predictable choice, which alleviated market concerns. His appointment came after Wall Street had closed on Friday, but news of his selection pushed bond markets into a rally, with U.S. Treasury yields sliding. The benchmark 10-year U.S. Treasury yield fell to around 4.34%, dropping about 7 basis points.
The dollar weakened in response, dropping 0.7% against the yen and 0.6% against the euro, as traders bought into Treasuries. The yen was last trading at 153.76 per dollar, while the euro rebounded to $1.0477, recovering from a two-year low. Other currencies also benefited, with the British pound rising 0.5% to $1.2592 and the Australian dollar gaining 0.6% to $0.6538. The New Zealand dollar rose 0.5% amid expectations of a 50-basis-point rate cut by the Reserve Bank of New Zealand this week.
In equity markets, Japan’s Nikkei index surged 1.6%, while South Korea’s Kospi climbed 1.5%, and Australia’s share market hit a record high with a 0.7% increase. Chinese markets, however, underperformed. Hong Kong’s Hang Seng gained 0.2%, but mainland Chinese stocks declined by 0.2%, weighed down by concerns over potential tariffs under the incoming Trump administration and disappointing stimulus measures from Beijing.
The appointment of Bessent is closely watched by bond markets, as expectations of fiscal policies, such as tax cuts, tariffs, and potential immigration crackdowns under the Trump administration, have raised inflation and deficit concerns. Bessent has indicated that he would gradually introduce tariffs and has advocated for policies to stimulate economic growth and reduce debts.
Meanwhile, Bitcoin experienced a slight uptick, trading at $97,511, just shy of its record high of $99,830 reached on Friday. This surge in Bitcoin’s value is linked to expectations of a more crypto-friendly regulatory environment under Trump.
Crude oil prices also saw a boost, hovering near two-week highs. Brent crude futures rose by 0.2% to $75.30 per barrel, while U.S. West Texas Intermediate crude futures gained 0.2%, reaching $71.38 per barrel. Both oil benchmarks had rallied around 6% the previous week, driven by rising geopolitical tensions between Western powers and major oil producers like Russia and Iran, which increased concerns over potential supply disruptions.
As the Thanksgiving holiday approaches, trading volumes are expected to be lighter, but market reactions to Bessent’s appointment and ongoing geopolitical developments continue to drive global financial sentiment.
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