By Kevin Buckland

Asian Markets Update

Asian stocks rose on Tuesday as U.S. bond yields and the dollar retreated from multi-month highs. Traders are looking towards President-elect Donald Trump’s cabinet selections to assess the Federal Reserve's easing outlook.

Tech shares showed gains, reflecting Wall Street's recovery from last week’s losses, although Nvidia's earnings report on Wednesday limited significant movements in the sector.

Market Reactions

Expectations for a quarter-point interest-rate cut by the Fed in December decreased from 62% to less than 59%, as some analysts suggested Trump's proposed fiscal spending may hinder rate cuts, given the resilient economic data.

Trump has started appointing cabinet members, filling positions in health and defense. However, key roles related to finance, like Treasury Secretary and Trade Representative, remain unannounced.

• Japan's Nikkei rose by 0.2%
• South Korea's Kospi and Australia's equity benchmark each increased by 0.1%
• Hong Kong's Hang Seng climbed 0.8%
• Mainland blue chips gained 0.3%

U.S. S&P 500 futures indicated a slight decline, despite a 0.4% rise in the cash index overnight. MSCI's index of world stocks ended a four-day losing streak.

Economic Insights

Kyle Rodda, a senior analyst at Capital.com, noted that the main influence on asset prices is speculation about the Trump administration’s effect on economic conditions, international trade, and global geopolitics. Markets are recalibrating expectations on Fed rate cuts in light of evolving policies.

Treasury Yields and Currency Movement

U.S. Treasury yields fell, leading to a weakened dollar, which remained close to its overnight low against major currencies. The dollar index was stable at 106.20, having peaked at 107.07 previously.

Bitcoin, which hit a record of $93,480, was consolidating around $90,000, last trading at $90,960. Safe-haven gold remained flat at $2,614.80, following a nearly 2% increase amid dollar weakness and Russia-Ukraine conflict concerns.

International Relations and Oil Prices

In a policy shift, the Biden administration has permitted Ukraine to use U.S. weapons against Russia, escalating tensions. Brent crude futures increased to $73.37 a barrel, while U.S. West Texas Intermediate prices rose to $69.26 a barrel, supported by a Norwegian oilfield shutdown due to a power outage.