(Bloomberg) — A strong Asian day for stocks and Treasuries looks set to extend into Europe, where traders are accepting Donald Trump’s selection of Scott Bescent for Treasury Secretary as a calculated choice that would inject more stability into the U.S. economy and financial markets.
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Euro Stoxx 50 futures rose 0.6%, mirroring gains in their US counterparts. The upbeat tone continued from Asia, where market benchmarks from Japan to India advanced. Meanwhile, the yield on the 10-year Treasury note fell seven basis points to 4.33%. The dollar fell while Bitcoin rebounded from the weekend decline.
Market movements indicate a reversal of some of the elements that define the so-called “Trump Trade,” including a rising dollar and a rising Bitcoin. The slowdown in enthusiasm for these assets comes as traders reduce their expectations that the president-elect will cut taxes and boost tariffs, policies that could keep interest rates high and support the US currency.
Besant, who runs macro hedge fund Key Square Group, indicated he would support Trump’s plans to cut tariffs and taxes, but investors expect him to prioritize economic and market stability over political point-scoring. The nomination eased concerns about the next president’s protectionist policies, which threatened to stoke inflation, exacerbate trade tensions and increase market volatility.
“We have Trump’s deflationary agenda, and obviously there may be someone in charge of the economy at the Treasury who may be more gradualist,” Vincent Govins, global market strategist at JPMorgan Asset Management, told Bloomberg TV. “American exceptionalism will persist to some extent on the economic front, but also on the market front.”
The Bloomberg Dollar Index fell the most in more than two weeks, with the Danish krone leading the gains. Traders betting on Trump’s fiscal policies — including sweeping trade tariffs and continued economic growth — had pushed the dollar higher for eight straight weeks through Friday.
The euro also rose against the dollar, after ECB Governing Council member François Villeroy de Galhau said ECB policy will evolve regardless of what happens at the Fed.
Stock indices rose in India after Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP)-led coalition won a landslide victory in Maharashtra. However, Chinese stocks bucked the trend in the region, reflecting continued investor disappointment over the lack of stronger fiscal measures to revive the world’s second-largest economy. The country’s central bank kept the interest rate on loans unchanged.
Japan and United States data
Oil fell after Israel said there would likely be a few days before a ceasefire agreement was reached with Lebanese Hezbollah. 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 indicated last week that the December policy meeting has already begun. The Reserve Bank of New Zealand is expected to cut its key interest rate on Wednesday.
Elsewhere, a set of inflation and growth readings are scheduled for release in Europe. Traders will closely analyze the Fed’s November meeting minutes, consumer confidence and personal consumer spending data to help assess expectations for interest rate cuts next year.
Main events this week:
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Bank of England Deputy Governor Claire Lombardelli and rate-setting official Wattie Dhingra speak on Monday
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European Central Bank chief economist Philip Lane and Governing Council member Gabriel Makhlouf speak on Monday
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Riksbank Deputy Governor Anna Sim speaks on Tuesday
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US Federal Open Market Committee (FOMC) meeting minutes, new home sales, US Conference Board consumer confidence, Tuesday
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Bank of Canada Deputy Governor Reece Mendes speaks Tuesday
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Industrial profits in China, Wednesday
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Interest rate decision in New Zealand, Wednesday
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US Personal Consumption Expenditures, Initial Jobless Claims, GDP, Durable Goods, Wednesday
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Bank of Australia Governor Michelle Bullock speaks on Thursday
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South Korea’s interest rate decision, Thursday
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Eurozone economic confidence, consumer confidence, Thursday
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Unemployment in Japan, CPI in Tokyo, industrial production, retail sales, Friday
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Eurozone consumer price index, Friday
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The Bank of England releases its financial stability review and policy committee minutes on Friday
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Canada’s GDP, Friday
Some key movements in the markets:
Stocks
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S&P 500 futures rose 0.4% as of 6:56 a.m. London time
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Nasdaq 100 futures rose 0.5%
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Dow Jones Industrial Average futures rose 0.6%
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The MSCI Asia Pacific Stock Index rose 0.9%.
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MSCI Emerging Markets Index rises 0.7%
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S&P 500 futures rose 0.4%
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S&P/ASX 200 futures were little changed
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The Hang Seng Index in Hong Kong fell by 0.3%.
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The Shanghai Composite Index fell by 0.1%.
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Euro Stoxx 50 futures rose 0.6%.
Currencies
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The Bloomberg Dollar Spot Index fell 0.5%.
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The euro rose 0.6 percent to $1.0482
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The Japanese yen rose 0.3 percent to 154.32 yen to the dollar
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The yuan in external transactions rose 0.2 percent to 7.2477 per dollar
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The British pound rose 0.6 percent to $1.2600
Cryptocurrencies
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Bitcoin rose 1.2% to $98,210.34
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Ethereum rose 1.1% to $3,383.36
Bonds
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The yield on the 10-year Treasury note fell seven basis points to 4.33%.
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The yield on German 10-year bonds fell eight basis points to 2.24%.
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The yield on British 10-year bonds fell by 6 basis points to 4.39%.
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The Australian 10-year bond yield fell 6 basis points to 4.48%.
Goods
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Gold in spot transactions fell 1.9 percent to $2,665.21 per ounce
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West Texas Intermediate crude fell 0.7% to $70.75 a barrel
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Gold in spot transactions fell 1.9 percent to $2,665.21 per ounce
This story was produced with assistance from Bloomberg Automation.
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