Published : 1 week ago, on 25/11/2024

By Tom Westbrook

SINGAPORE (Reuters) -Asian stocks rallied with U.S. equity futures on Monday, while the dollar retreated against rivals as bond yields slid following the selection of fund manager Scott Bessent as the next U.S. Treasury secretary, with investors expecting he will be a voice for markets in Washington.

MSCI’s broadest index of Asia-Pacific shares climbed 1.6% as of 0143 GMT, and U.S. S&P 500 futures pointed 0.5% higher to just shy of a record high, after a 0.3% gain for the cash index at the end of last week. Bessent’s appointment came late on Friday, after Wall Street had shut.

The dollar dropped 0.7% against the yen and 0.6% versus the euro as traders snapped up Treasuries, sending the benchmark U.S. long-term yield down some 7 basis points to as low as 4.341% on Monday.

“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.

Japan’s Nikkei jumped 1.6% and South Korea’s Kospi climbed 1.5%. Australia’s share market rose 0.7% and reached a record high.

Chinese markets were heavy though, weighed by the threat of massive tariffs under the incoming Donald Trump administration and underwhelming stimulus announcements so far from Beijing.

Hong Kong’s Hang Seng added 0.2%, while mainland blue chips eased 0.2%.

The week’s trade is likely to be lightened by Thursday’s Thanksgiving holiday in the United States.

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 CNBC earlier in November, before his selection as Treasury secretary, that he would recommend “tariffs be layered in gradually”.

He has advocated, in a Bloomberg interview, for the U.S. to grow its way out of large debts and, in the Wall Street Journal for tax reform and deregulation, particularly to spur 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 last stood at 153.76 per dollar. The currency pair tends to closely follow moves in Treasury yields.

The euro changed hands at $1.0477, rebounding from Friday’s two-year trough at $1.03315.

Sterling climbed 0.5% to $1.2592. On Friday, it slumped to the weakest since early May at $1.2475.

The Aussie dollar bounced 0.6% to $0.6538 and the kiwi, which slid to a one-year low on Friday on increasing bets on a dovish central bank, jumped 0.5% to $0.5865. The Reserve Bank of New Zealand meets on Wednesday with a 50 bp rate cut fully priced and markets implying about a 1/3 chance of a super-sized 75 bp cut.

Bitcoin ticked up slightly from Sunday to $97,511. On Friday, it reached a record peak of $99,830 amid expectations of a more friendly regulatory environment for cryptocurrencies under Trump.

The token is up about 45% since Trump’s sweeping election victory on Nov. 5, when voters also elected a slew of pro-crypto lawmakers to Congress.

Crude oil hovered near two-week highs as geopolitical tensions heightened between Western powers and major oil producers Russia and Iran, raising risks of supply disruption.

Brent crude futures climbed 0.2% to $75.30 a barrel, while U.S. West Texas Intermediate crude futures were at $71.38 a barrel, up 0.2%. Both benchmarks rallied about 6% last week.

(Editing by Kim Coghill and Stephen Coates)