SINGAPORE (Reuters) – Bonds rose, U.S. stock futures rose and the dollar fell in early trading on Monday as investors cheered the appointment of fund manager Scott Bessent as the next U.S. Treasury secretary, anticipating he would be a vote for the markets in Washington.
Benchmark 10-year Treasury futures rose 13 ticks ahead of the cash open, and S&P 500 futures rose 0.4% to just above a record high, while the dollar was weaker across the board, helping the battered euro rose 0.5% to $1.0484.
“The market believes Bessent is a ‘safe hands’ candidate,” said Stephen Spratt, strategist at Societe Generale, a relief as the risk of a more unorthodox choice was priced out of the markets.
The Australian stock market reached a record high. Futures pointed to a stronger open in Japan and a weaker start in Hong Kong. This week’s trading will likely be lightened by Thursday’s Thanksgiving holiday.
The appointment by newly elected Treasury Secretary Donald Trump is being closely watched in bond markets as expectations of tax cuts, tariffs and an immigration crackdown have fueled fears of inflation and large budget deficits.
Bessent told CNBC earlier in November, before his appointment as finance minister, that he would recommend “phasing in the rates.”
He has advocated in a Bloomberg interview for the US to grow out of massive debt and, in the Wall Street Journal, for tax reform and deregulation, especially to boost bank lending and energy production.
He spent his career working for billionaire investor George Soros and noted short seller Jim Chanos, as well as running his own hedge fund.
The yen rose about 0.4% to 154.15 per dollar.
The Australian dollar rose 0.6% to $0.6541 and the kiwi, which slid to a one-year low on Friday after raising bets on a dovish central bank, rose 0.5% to $0.5862. The Reserve Bank of New Zealand meets on Wednesday with a 50 bp rate cut fully priced in and markets imply about a 1/3 chance of a super-sized 75 bp cut.
(Editing by Kim Coghill)
