Global stocks and bonds rise after Bessent’s appointment as US Treasury Secretary – ThePrint – ReutersFeed

Nell McKenzie and Tom Westbrook
LONDON/SINGAPORE (Reuters) – Global markets cheered the election of fund manager Scott Bessent as U.S. Treasury secretary on Monday on hopes he can rein in debt levels, while falling yields weighed on the dollar and commodities such as gold and oil , have decreased.

Wall Street had hoped to open higher after Donald Trump picked financial hawk Bessent as Treasury secretary, a decision that appeared to be welcomed by markets.

Europe’s main stock index hit a two-week high on Monday, boosted by Bessent’s appointment and comments from the ECB’s chief economist on monetary easing, although lenders UniCredit and Commerzbank fell on share buyback news.

The pan-European STOXX 600 index was last trading 0.1% lower, with Frankfurt and London up around 0.1% and Paris up 0.1%.

Shares in Italian bank UniCredit CRDI.MI fell 3.5% after a surprise 10 billion euro ($10.45 billion) offer to buy all the shares of smaller domestic rival Banco BPM BAMI.MI , which rose 2.6%.

Shares in Commerzbank CBKG.DE fell 5.6%, weighing on the banking index as investors weighed the impact of the Unicredit Banco BPM deal on the German lender’s likely buyout offer.

The 10-year Treasury yield fell about 4 basis points to 4.36% and the dollar fell 0.2% against the yen to 154.52.

Sterling rose 0.2% to $1.2558, while the euro strengthened 0.5% against the US dollar.

“The market view is that Bessent is a ‘safe hand’ candidate,” said Societe Generale strategist Stephen Spratt, a relief as the risk of a more unconventional pick was taken out of markets and as Bessent mentioned curbing US borrowing.

Japan’s Nikkei index closed up 1.30%, while China’s blue-chip index fell to a five-week low and Hong Kong shares fell to their lowest level in two months as fears over a looming US trade war and heightened geopolitical tensions eased an already waning appetite for risk. .

President-elect Trump’s nomination of a Treasury secretary is being closely watched in bond markets as expectations of tax cuts, as well as tariffs and an immigration crackdown, fuel fears of inflation and large deficits.

In an interview published Sunday, Bessent told the Wall Street Journal that cutting taxes and spending is a priority.

Bessent told CNBC earlier in November, before he was chosen as finance minister, that he would recommend “a gradual increase in tariffs,” although his appointment provided only the most basic and short-term boost to the Chinese yuan.

EURO PRESSURE

The broad sell-off eased pressure on the euro, which fell sharply this month on concerns about Trump’s tariffs, worsening economic conditions and signs of an escalating war between Russia and Ukraine.

European data due this week will shed light on the eurozone’s economic trajectory, said Bruno Schneller, managing partner at Erlen Capital Management in Zurich.

“Looking ahead, the risk of increased volatility remains, especially on the back of preliminary November inflation data from Germany on Thursday and France on Friday,” Schneller said.

At $1.0476, the euro recovered from last week’s two-year lows, although there was no sigh of relief.

“This difficult situation reinforces the balancing act of the European Central Bank in preparation for its meeting on December 12,” Schneller added.

Expectations for a 50 basis point ECB rate cut in December have risen, with market participants now estimating the likelihood of such a move to be more than 50%.

The coming week in the US is likely to be eased by the Thanksgiving holiday on Thursday, with many traders likely to enjoy a long weekend.

October PCE and unemployment data will be released on Wednesday along with the latest GDP estimate, followed by Federal Reserve minutes on Tuesday.

Markets still expect the Fed to cut rates next month, although bets on a rate cut have been scrapped in recent weeks.

Bitcoin fell 1.26% since Sunday to $98,138. It hit a record high of $99,830 on Friday amid expectations of a friendlier regulatory environment for cryptocurrencies under Trump.

It has risen about 30% since Trump’s landslide victory in the Nov. 6 election, when voters also elected a slew of pro-crypto lawmakers to Congress.

Oil prices fell on Monday after rising 6% last week, but supply concerns amid rising tensions between Western powers and major oil producers Russia and Iran kept prices on the floor.

Brent crude futures were steady at $75.15 a barrel by 1224 GMT, while U.S. West Texas Intermediate crude futures fell 7 cents to $71.17 a barrel.

Spot gold fell about 1% to $2,682 an ounce.

(Reporting by Nell McKenzie and Tom Westbrook; Editing by Dhara Ranasinghe, Kim Coghill, Stephen Coates, Ian Harvey and Ed Osmond)

Disclaimer: This report is automatically generated by Reuters News Service. ThePrint is not responsible for its content.