Trump considers "shadow Fed chair," as the dollar and U.S. Treasury yields decline together, while U.S. stock futures and European stocks strengthen slightly
Expectations for interest rate cuts are rising, risk assets are climbing, U.S. Treasury yields and the U.S. dollar index are declining, European and U.S. stock index futures are slightly up, oil prices have risen for two consecutive days, and cryptocurrencies and spot gold are also rising
On Thursday, the 26th, even though Powell has not yet left office, the market expects Trump to appoint a "dovish" Federal Reserve chairman in advance, reinforcing expectations for an early interest rate cut by the Federal Reserve. U.S. Treasury yields and the dollar index fell, European and U.S. stock index futures rose slightly, oil prices increased for two consecutive days, and cryptocurrencies and spot gold rose.
The following are the trends of core assets:
The three major U.S. stock index futures all rose over 0.2%.
Most European stocks rose slightly, with the German stock market opening up 0.47%, the French stock market opening up 0.38%, and the British stock market opening down 0.13%.
The Nikkei 225 index closed up 1.6%. The Tokyo Stock Exchange index closed up 0.8%. The Seoul Composite Index closed down 0.9%.
Most U.S. Treasury yields fell, with the benchmark 10-year U.S. Treasury yield down more than 2 basis points.
The dollar index fell about 0.4%, the British pound rose about 0.5%, and the euro rose about 0.3%.
Spot gold rose about 0.3%, and spot silver rose about 0.2%.
U.S. oil and Brent oil rose about 0.3%.
Bitcoin rose about 1.4%, and Ethereum rose about 1.8%.
The market expects that the new candidate for the Federal Reserve chairman may lean dovishly. Zaman, head of foreign exchange research at ANZ Bank, stated that Trump has consistently called for interest rate cuts, so he will choose someone who shares his views.
In terms of the stock market, U.S. stock futures rose slightly.
Previously, NATO leaders agreed to increase defense spending to 5% of GDP, responding to Trump's repeated criticisms of insufficient military spending. The increase in NATO military spending is favorable for defense companies, and the market expects a significant increase in military orders, leading to a surge in defense stocks in the Asia-Pacific region. Australia's drone defense company DroneShield rose over 7%, with a cumulative increase of about 200% this year.
In terms of commodities, oil prices have risen for two consecutive days due to investors' ongoing concerns about the unstable ceasefire situation in the Middle East, but the increase is limited as Russia stated it would consider increasing production again at the next OPEC+ meeting.
In terms of foreign exchange, hot money is flowing into Asian markets. On Thursday, the exchange rate of Asian currencies against the dollar reached an eight-month high, with fund managers believing that Asian currencies still have room to rise. Due to the market's repeated responses to the "stop-and-go" tariff policy and doubts about the dollar's status in global trade, the dollar has fallen more than 8% this year.
