Bonds rallied, U.S. stock futures rose, and the dollar weakened on Monday as investors welcomed the appointment of fund manager Scott Bessent as the next U.S. Treasury Secretary.
Markets perceived Bessent as a stabilizing presence, fueling optimism in Washington.
Benchmark 10-year Treasury futures climbed 13 ticks ahead of the cash open, while S&P 500 futures rose 0.4%, approaching record highs.
The dollar softened against major currencies, lifting the euro by 0.5% to $1.0484.
“The market view that Bessent is a ‘safe hands’ candidate,” said Stephen Spratt, strategist at Societe Generale, “is a relief as the risk of a more unorthodox pick was priced out of markets.”
In Asia, Australia’s stock market (.AXJO) hit a record high, while futures indicated gains in Japan and a weaker start in Hong Kong.
Trade volumes are expected to thin ahead of Thursday’s Thanksgiving holiday in the U.S.
Bessent’s appointment has been a key focus in bond markets amid concerns over potential inflation and deficits stemming from tax cuts, tariffs, and immigration policy under the incoming Trump administration.
Before his selection, Bessent told CNBC he would recommend “tariffs be layered in gradually.”
In past interviews, he has advocated for tax reform, deregulation, and policies to boost bank lending and energy production, suggesting that the U.S. could “grow its way out of large debts.”
Bessent’s career includes working with billionaire investor George Soros, short seller Jim Chanos, and running his own hedge fund.
In currency markets, the yen gained 0.4% to 154.15 per dollar.
The Australian dollar rose 0.6% to $0.6541, while the New Zealand dollar rebounded 0.5% to $0.5862 following Friday’s slide.
The Reserve Bank of New Zealand meets on Wednesday, with a 50 basis-point rate cut fully priced and a 1-in-3 chance of a 75 basis-point cut.