Global markets responded positively as Donald Trump announced Scott Bessent, a seasoned hedge fund manager, as his choice for U.S. Treasury Secretary. This decision sparked a rally across major financial markets, offering a glimmer of optimism amid recent economic turbulence.
Global Markets Cheer the Decision
The appointment of Scott Bessent, head of Key Square Group, was met with enthusiasm by investors and analysts alike. Viewed as a stabilizing figure, Bessent’s nomination signals a focus on market and economic stability under Trump’s administration.
Asian markets led the charge, with Tokyo’s Nikkei 225 surging by 1.3% to 38,780.14 and South Korea’s Kospi rising 1.3% to 2,534.34. In Australia, the S&P/ASX 200 climbed 0.3% to 8,417.60. Gains were also seen in Taiwan’s Taiex, which added 0.2%, and India’s Sensex, up 1.4%.
Stephen Spratt, strategist at Societe Generale, noted, “The market view is that Bessent is a ‘safe hands’ candidate.”
UK Markets Open Higher
Across the Atlantic, UK markets echoed the optimism. The FTSE 100 gained 0.5%, reaching 8,299.54 in early trading, while the FTSE 250 soared by 1.6% to 20,683.69. The markets welcomed the prospect of a steadying hand guiding the world’s largest economy, especially after weeks of speculation.
Bond Yields Reflect Confidence
Bond markets also rallied following the announcement. The benchmark 10-year U.S. Treasury yield dropped by more than five basis points to 4.36%, a clear sign of investor confidence in Bessent’s capability to manage public finances.
Erik Nielsen, chief economics advisor at UniCredit, commented, “You could literally hear the sigh of relief from financial market participants in the U.S. when Bessent was announced.”
China Bucks the Trend
Amid the global rally, China’s markets moved in the opposite direction. The Shanghai Composite dipped 0.4% to 3,253.28, while Hong Kong’s Hang Seng fell 0.3% to 19,172.07. The declines followed the People’s Bank of China’s decision to leave its one-year medium-term lending facility rate unchanged at 2%.
Shares in major tech firms tumbled, with Meituan down 4% and Tencent sliding 1.5%.
Dollar and Bitcoin React to the News
The U.S. dollar, which has been on a weeks-long rally, lost some ground following the announcement. The greenback dipped against major currencies, with the euro climbing 0.5% to $1.0469 and the Japanese yen rising 0.3% to 154.35 per dollar.
Bitcoin also saw a minor decline, slipping below $97,000 before recovering to $97,495.7. Traders appeared to interpret Bessent’s nomination as a signal for a measured approach to fiscal policies, tempering more aggressive market bets.
Anglo American Sells Coal Business
In a separate development, Anglo American announced the sale of its steelmaking coal business for $4.9 billion, marking a significant shift in its strategy. The miner will divest its Australian assets to Peabody Energy for $3.8 billion and its 33% stake in coal miner Jellinbah for $1.1 billion.
“This sale is another important step towards delivering the strategy we set out in May to create a world-class copper, premium iron ore, and crop nutrients business,” said CEO Duncan Wanblad.
Hiring Slows After Tax Changes
Meanwhile, UK businesses are reeling from recent tax changes introduced by Chancellor Rachel Reeves. A survey by the Confederation of British Industry (CBI) revealed that nearly two-thirds of companies plan to reduce hiring due to increased employer National Insurance contributions, which rose from 13.8% to 15%.
CBI CEO Rain Newton-Smith is set to warn at the group’s annual conference, “Tax rises like this must never again simply be done to business.”
What’s Next for Markets?
Traders now turn their attention to key economic indicators, including inflation data from Japan and the Reserve Bank of New Zealand’s rate decision later this week. Analysts are also eyeing U.S. consumer confidence and personal consumption expenditure figures, which could shape the Federal Reserve’s approach to potential rate cuts in December.
Chris Weston, head of research at Pepperstone Group, remarked, “Weaker U.S. data could see pricing for a 25 basis point rate cut rise above 50%, supporting equity risk and pressuring the dollar.”
A Stable Start for the Trump Administration?
Bessent’s nomination has provided a sense of relief to markets, with investors hoping for a steady and pragmatic approach to fiscal management. While challenges remain, including inflationary pressures and geopolitical tensions, the Treasury pick offers a promising start for Trump’s second term.