New Secretary Cheers Markets; Trump Trade Eased

• Equities and Treasuries rise, as markets view Donald Trump’s choice of Scott Bessent for Treasury Secretary as a stabilizing decision for the US economy and markets.
• Bessent: Head of macro hedge fund Key Square Group, supports Trump’s tax and tariff policies but gradually. He is expected to focus on economic and market stability rather than political gains. His nomination alleviates concerns over protectionist policies that could escalate inflation, trade tensions, and market volatility.
  
• Asian stocks rose, driven by gains in Japan, South Korea, and Australia. Chinese equities fail to follow regional trends, presenting investors’ continued disappointment by the lack of strong fiscal measures to boost the economy. The PBOC  keeps policy loan rates unchanged after the September cut.
• US futures also see slight increases. 10-year Treasury yields fall by 5 basis points to 4.35%. Nvidia dropped 3.2%, affected by its high valuation and influence on broader market trends. Intuit fell 5.7% after a disappointing earnings forecast. Meta Platforms declined 0.7% following the Supreme Court’s decision to allow a class action lawsuit over the Cambridge Analytica scandal.
• Key events this week: 
  • Japan’s CPI, as the BOJ signals a possible policy change at December’s meeting.
  • RBNZ expected to cut its key rate on Wednesday.
  • CPI & GDP from Europe will be released.
  • Traders will focus on the Fed’s November meeting minutes, along with consumer confidence and personal consumption expenditure data, to assess potential rate cuts next year.

Financial Markets Performance:

• The US Dollar declines as US Treasuries climb.
• Bitcoin recovers from a weekend drop, hovering around 98,000, having more than doubled in value this year. Analysts suggest consolidation around the 100,000 level before any potential breakthrough.
• EURUSD recovers slightly to 1.0463 from 1.0320 lows.
• Oil prices drop after the largest weekly increase in nearly two months, with ongoing geopolitical risks in Ukraine and the Middle East. UKOIL fell below $75 a barrel, while USOIL is at $70.35.
  • • Iran announced plans to boost its nuclear fuel-making capacity after being censured by the UN, increasing the potential for sanctions under Trump’s administration.
    • Israel’s ambassador to the US indicated a potential cease-fire deal with Hezbollah, which could ease concerns about Middle Eastern oil production, a region supplying about a third of the world’s oil.
    • Russia’s war in Ukraine escalated with longer-range missile use, raising concerns about potential disruptions to crude flows.
    • Citigroup and JPMorgan predict that OPEC may delay a planned increase in production for the third time during their meeting this weekend.
• Gold falls to $2667.45 after its largest rise in 20 months last week.Swaps traders see a less-than-even chance the central bank will cut rates next month. Higher borrowing costs tend to weigh on gold, as it doesn’t pay interest.