Investors view the choice of Scott Bessent as Treasury Secretary as a “balanced” option. At the same time, the US dollar weakened after the information about the new US Treasury Secretary.
Reported by UNN with reference to Bloomberg and FT.
The US dollar weakened and Treasury bonds rose on Monday amid news of Donald Trump's selection of Scott Bessent as Treasury Secretary.
From the beginning of last month to Friday, the index rose by more than 7%, becoming the main beneficiary of the so-called “Trump trade” amid expectations that his tariff and tax cut policies will lead to higher inflation and higher interest rates in the US.
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But traders are adjusting expectations about the likelihood of tax cuts and tariff increases. The appointment of Scott Bessent, as noted by observers, has eased concerns about the protectionist policy of the US president-elect.
Bessent's nomination is a sign that Trump may not be “all in” on the most inflationary strategies, including tariffs
Investors perceive the choice of Bessent as a sign that the newly elected president's policies may be moderate.
Having at least one significant supporter at the negotiating table in the government who opposes permanent trade taxes is a positive factor for markets
Addendum
US Treasury bonds, which had been sold off due to the prospect of inflationary pressures, recovered. The yield on the 10-year US bond fell by 0.07 percentage point to 4.34 percent. Yields move inversely to prices.
S&P 500 futures were up 0.5 percent. European markets opened higher, with the Stoxx Europe 600 index up 0.2 percent and Britain's FTSE 100 index up 0.3 percent. European stocks underperformed US markets on tariff fears.
Major Asian trading partners of the United States were encouraged by the news of the appointment. Japan's Nikkei 225 export index and South Korea's Kospi were both up 1.3 percent.
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