European equities are poised to open significantly higher on Monday following the announcement that U.S. President-elect Donald Trump has selected hedge fund billionaire Scott Bessent as his Treasury Secretary. This decision has sparked optimism regarding the possibility of "tariffs being gradually implemented."
Bessent, in an interview with Bloomberg, advocated for stimulating U.S. economic growth as a strategy to manage substantial debts. Additionally, he has expressed support in The Wall Street Journal for tax reforms and deregulation, particularly to enhance bank lending and boost energy production.
Asian markets generally experienced gains, the dollar softened, and bond yields declined following Bessent's nomination, which suggests a tilt towards moderate economic policies.
In commodity markets, gold prices fell nearly 2 percent during Asian trading, while oil prices declined about 1 percent. These movements were influenced by reports of discussions aimed at a ceasefire between Israel and Hezbollah, indicating a potential reduction in Middle East tensions.
On the economic front, this week's U.S. calendar is highlighted by the release of consumer price inflation data favored by the Federal Reserve, along with the minutes from its latest meeting. Reports on durable goods orders, new home sales, and weekly jobless claims are also anticipated.
U.S. stocks rose on Friday, registering solid weekly gains, which partially recovered from the sharp declines observed in the preceding week. The Dow Jones leaped 1 percent to achieve a new record closing high, while the S&P 500 increased by 0.4 percent, marking its fifth consecutive day of gains. Meanwhile, the Nasdaq Composite, known for its tech focus, inched up by 0.2 percent.
In Europe, stocks concluded Friday's session on a strong note amid expectations that the European Central Bank will gradually reduce interest rates by 2025. The pan-European Stoxx 600 advanced 1.2 percent, with Germany's DAX rising 0.9 percent, France's CAC 40 gaining 0.6 percent, and the U.K.'s FTSE 100 surging by 1.4 percent.
