SINGAPORE (Reuters) – Bonds rallied, U.S. stock futures rose and the dollar eased in early trade on Monday as investors cheered the appointment of fund manager Scott Bessent as the next U.S. Treasury secretary, figuring he would be a voice for markets in Washington.
Benchmark 10-year Treasury futures were up 13 ticks, ahead of the cash open and S&P 500 futures rose 0.4% to just shy of a record high while the dollar was weaker across the board, lifting the battered euro by 0.5% to $1.0484.
“The market view that Bessent is a ‘safe hands’ candidate,” said Stephen Spratt, strategist at Societe Generale (OTC:SCGLY), a relief as the risk of a more unorthodox pick was priced out of markets.
Australia’s share market touched a record high. Futures pointed to a stronger open in Japan and a weaker start in Hong Kong. The week’s trade is likely to be lightened by Thursday’s Thanksgiving holiday.
President-elect Donald 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 was up about 0.4% to 154.15 per dollar.
The Aussie dollar bounced 0.6% to $0.6541 and the kiwi, which slid to a one-year low on Friday on increasing bets on a dovish central bank, bounced 0.5% to $0.5862. 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.