(Bloomberg) — Equities and Treasuries advanced, with traders embracing Donald Trump’s pick of Scott Bessent for Treasury Secretary as a measured choice that would inject more stability into the US economy and financial markets.
A gauge of Asian stocks rose about 1%, led by gains in Japan, South Korea and Australia. US futures also edged higher. Meanwhile, the yield on 10-year Treasuries dropped five basis points to 4.35%. The dollar declined while Bitcoin rebounded from a weekend drop.
Bessent, who runs macro hedge fund Key Square Group, has indicated he’ll back Trump’s tariff and tax cut plans but investors expect him to prioritize economic and market stability over scoring political points. The nomination has eased concerns over the incoming president’s protectionist policies, which had threatened to stoke inflation, worsen trade tensions and amplify market volatility.
Elements of the so-called Trump Trade that feature a surging dollar and rallying Bitcoin are cooling, as traders trim bets on elevated interest rates that may result from pricier imports and lower taxes.
“We have the Trump reflationary agenda with obviously maybe someone in charge of the economy at the Treasury who is probably more gradualist,” Vincent Juvyns, global market strategist at JPMorgan Asset Management, told Bloomberg TV. “US exceptionalism will to some extent remain in place on the economic front but also on the market front.”
The Bloomberg’s dollar index fell by the most in over two weeks, with the yen leading the gains. Traders betting on Trump’s fiscal policies — including sweeping trade tariffs and persistent economic growth — had pushed the dollar up for eight straight weeks through Friday.
Back in Asia, stock benchmarks in India surged on Monday as Prime Minister Narendra Modi’s Bharatiya Janata Party-led alliance secured a thumping victory in the nation’s wealthiest state of Maharashtra. Still, local equities remain well off their highs for the year, as global funds have withdrawn over $14 billion since October amid concerns over earnings growth, elevated valuations and the recent US charges against the Adani Group.
“This is a short-term relief rally,” said Sonam Srivastava, founder of Wright Research. “We have to wait for a substantial return of foreign capital.”
Chinese stocks bucked the region’s trend, reflecting investors’ continued disappointment with a lack of stronger fiscal measures to revive the world’s No. 2 economy. Meanwhile, the country’s central bank kept a policy loan rate unchanged after last cutting it in September.
Japan, US Data
Oil dropped after the biggest weekly advance in almost two months as geopolitical risks in Ukraine and the Middle East kept investors on edge. Gold also fell after jumping the most in 20 months last week.
This week, traders in Asia will be closely monitoring Japan’s inflation data after Bank of Japan Governor Kazuo Ueda last week indicated the December policy meeting is live. The Reserve Bank of New Zealand is expected to cut its key rate on Wednesday.
Elsewhere, a swath of inflation and growth readings in Europe are due. Traders will closely parse the Federal Reserve’s November meeting minutes, consumer confidence and personal consumption expenditure data to help assess the outlook for rate cuts next year.
Key events this week:
BOE Deputy Governor Clare Lombardelli and rate-setter Swati Dhingra speak, Monday
ECB chief economist Philip Lane and Governing Council Member Gabriel Makhlouf speak, Monday
Riksbank Deputy Governor Anna Seim speaks, Tuesday
US FOMC minutes, new home sales, US Conference Board consumer confidence, Tuesday
Bank of Canada Deputy Governor Rhys Mendes speaks, Tuesday
China industrial profits, Wednesday
New Zealand rate decision, Wednesday
US PCE, initial jobless claims, GDP, durable goods, Wednesday
Bank of Australia Governor Michelle Bullock speaks, Thursday
South Korea rate decision, Thursday
Eurozone economic confidence, consumer confidence, Thursday
Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
Eurozone CPI, Friday
Bank of England issues financial stability review and policy committee minutes, Friday
Canada GDP, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 2:04 p.m. Tokyo time
Nikkei 225 futures (OSE) rose 1.4%
Japan’s Topix rose 1%
Australia’s S&P/ASX 200 rose 0.4%
Hong Kong’s Hang Seng fell 0.6%
The Shanghai Composite fell 0.3%
Euro Stoxx 50 futures rose 0.8%
Currencies
The Bloomberg Dollar Spot Index fell 0.5%
The euro rose 0.6% to $1.0478
The Japanese yen rose 0.4% to 154.19 per dollar
The offshore yuan rose 0.2% to 7.2485 per dollar
Cryptocurrencies
Bitcoin rose 1% to $98,032.92
Ether rose 1% to $3,380.56
Bonds
Commodities
West Texas Intermediate crude fell 0.5% to $70.88 a barrel
Spot gold fell 1.6% to $2,671.94 an ounce
This story was produced with the assistance of Bloomberg Automation.
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