SINGAPORE- Bond markets cheered the selection of fund manager Scott Bessent as US Treasury secretary on Monday on expectations he could keep a leash on US debt, while falling yields tugged down the dollar and the mood lifted US stock futures close to record highs.
In Asia’s equity markets Japan’s Nikkei jumped 1.7 percent while rises in Sydney and Seoul offset selling in Hong Kong and China to lift MSCI’s broadest index of Asia shares outside Japan about 0.7 percent
S&P 500 futures were last 0.5 percent higher while Dow and Nasdaq futures were up 0.6 percent. Even beaten-down European futures rose 0.7 percent and the friendless euro which hit a two-year low on Friday, bounced 0.5 percent.
Italian lender UniCredit announced a $10.6 billion all-scrip bid for rival Banco BPM – putting those stocks on the radar at the open in Milan.
Benchmark 10-year Treasury yields were down more than 5 basis points to 4.355 percent and the dollar was also lower on the yen sterling and Antipodean currencies.
“The market view (is) that Bessent is a ‘safe hands’ candidate,” said Stephen Spratt, strategist at Societe Generale, a relief as the risk of a more unorthodox pick was priced out of markets and as Bessent has mentioned restraining US borrowing.
President-elect Trump’s appointment of a Treasury secretary has been closely watched in bond markets as expectations of tax cuts as well as tariffs and an immigration crackdown have stoked fears of inflation and big deficits.
Bessent told the Wall Street Journal in an interview published on Sunday that both tax and spending cuts were priorities.
Bessent told CNBC earlier in November, before his selection as Treasury secretary, that he would recommend “tariffs be layered in gradually”, though his appointment gave only the merest and short-lived boost to China’s yuan
The currency last traded flat at 7.2445 to the dollar while the stock market was heavy with selling across e-commerce stocks in Hong Kong. The Hang Seng fell 0.4 percent and Shanghai Composite 0.6 percent. The week ahead is likely to be lightened by Thursday’s Thanksgiving holiday in the United States, where many traders will probably make a long weekend of it.
