— Traders believe that Trump's choice of Bessenet as Treasury Secretary is a well-thought-out decision, which has suppressed some of the frenzied bets triggered by Trump's victory.
The US dollar index opened sharply lower on Monday, erasing all gains from Friday within an hour, which reflects the market's response to Trump's nomination of Bessenet as the next US Treasury Secretary.
While the dollar is falling, most markets for gold, US stock futures, Bitcoin, and offshore yuan are surging. The trend of A-shares has become the most concerning issue for people.
It seems ironic, as Bessenet wrote an article after Trump's victory that drew high praise from Trump.
"Trump's election pushed the dollar to its largest single-day gain in over two years, ranking third in the past decade. This is a vote of confidence in America's international leadership and the dollar as the world's reserve currency." — (The Wall Street Journal) Column on November 11.
1. US stock futures gapped up today, possibly due to two considerations (or one of them):
First, Bessenet is a fiscal hawk, and his role as Treasury Secretary will certainly be beneficial for the overall economy and market.
Second, Bessenet may slow down the pace of tariffs, as he has talked about a phased approach to tariffs. We have a special analysis on this in (Global Market Strategy), suggesting that Trump's tariff policies may be implemented in three phases, corresponding to three 'buy points' and 'sell points' for investors.
Although Bessenet stated that he would support Trump's tariff and tax reduction plans, investors expect him to prioritize economic and market stability over political gains. He brings a sense of near gradualism rather than a bold approach to make significant policy changes, which may relieve the market.
2. The offshore yuan has risen due to the decline of the US dollar, and the devaluation alarm has been temporarily lifted. Now traders' attention will be firmly focused on A-shares to see if they can benefit from this round of gains.
3. However, it should be noted that this week's timing is very special—Thanksgiving coincides with the end of the month, and there may be bizarre trends in major markets.
