US equity futures witnessed a gain on Friday as speculation about president-elect Donald Trump moderating his extreme trade policies led to the dollar's largest weekly loss in three months. This development had a significant impact on various markets.
Unraveling the Implications of Trump's Treasury Pick
Impact on US Equity Futures
The Bloomberg Dollar Spot Index extended its weekly decline, snapping eight weeks of gains. Scott Bessent's nomination last week has weakened the dollar's strength and boosted US stocks and bonds. Contracts on the S&P 500 rose 0.3%, indicating modest gains in the shortened post-holiday trading session on Wall Street. November has seen the S&P 500 rise 5%, on course for its strongest month since February. A handful of tech titans have propelled a 26% year-to-date gain, making this one of the strongest years for US stocks.Trading resumed after the Thanksgiving holiday, causing Treasury yields to fall. European stocks were relatively unchanged, but miners like Anglo American Plc outperformed due to optimism about China's measures to stimulate its economy.Influence on Currencies
The yen rose to its highest level in more than a month against the greenback, strengthening past 150 for a while. The dollar slipped against major currencies, with an index of greenback strength heading for its first weekly decline in two months. Strong Tokyo CPI reading supported the yen's further strengthening. With a more than 60% chance of the Bank of Japan raising interest rates next month, USD/JPY is likely to sustainably break below the key 150.00 support and move lower to test the 142.00 level.In other currency markets, Brazil's real tumbled to a record low due to disappointment over a government plan to cut spending. Some investors are also adjusting their expectations for US inflation and future Federal Reserve interest rate cuts following recent data.Effects on Commodities
Oil was steady as traders awaited further clues about OPEC+'s production plans after delaying a key virtual meeting by four days. Gold rose for a fourth session but is still on pace to drop for the first month in the past five.Key events this week include Eurozone CPI on Friday and the ECB releasing the consumer expectations survey for October. "Black Friday" marks the traditional start of the US holiday shopping rush.In stocks, the Stoxx Europe 600 was little changed as of 9:36 a.m. London time. S&P 500 futures rose 0.3%, Nasdaq 100 futures rose 0.4%, and futures on the Dow Jones Industrial Average rose 0.3%. The MSCI Asia Pacific Index rose 0.2%, while the MSCI Emerging Markets Index fell 0.1%.In currencies, the Bloomberg Dollar Spot Index fell 0.2%. The euro was little changed at $1.0562. The Japanese yen rose 0.9% to 150.18 per dollar. The offshore yuan was little changed at 7.2458 per dollar. The British pound was little changed at $1.2695.In cryptocurrencies, Bitcoin rose 1.2% to $96,297.14, and Ether was little changed at $3,571.29.In bonds, the yield on 10-year Treasuries declined four basis points to 4.22%. Germany's 10-year yield was little changed at 2.12%, and Britain's 10-year yield declined three basis points to 4.25%.This story was produced with the assistance of Bloomberg Automation.Copyright Bloomberg News.READ MORE