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Wall Street looking set for best month in a year

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Dollar dominance shifts as yen surges, ECB bets shift

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Asian equities set for monthly falls on Trump tariff fears

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Dollar set for a 3.1% weekly drop on yen

(Updates to close of trading)

By Alden Bentley and Naomi Rovnick

NEW YORK/LONDON, Nov 29 (Reuters) -

Global stock markets rallied on Friday, with Wall Street

crowning November with its biggest monthly gain in a year on

post-election growth hopes, while the dollar eased amid

prospects for firmer rates in Japan and easing in Europe.

U.S. trading was thin the day after Thanksgiving. Many

investors made it a long weekend and stocks and bonds closed

early, so most month-end position adjustments were done before

the holiday.

The S&P 500 rose 0.56% to mark the best monthly gain

since November 2023 of 5.14%, while the Nasdaq's 0.83%

rise Friday secured a 6.2% gain for the month, it's best since

May.

MSCI's broad gauge of world stocks rose

0.52%, also securing the best month since May.

Donald Trump's Nov. 5 election victory and pledges of tax

cuts, deregulation and import tariffs have supercharged

investors' expectations for U.S. and Wall Street stocks to keep

outperforming other regions. U.S. tech shares are also

benefiting from an artificial intelligence investing craze.

Speculation about Japanese rate hikes drove a rebound for

the yen, which ended with the biggest weekly gain vs

the buck since July. The dollar fell 1.25% on the day to 149.65

yen. It delved 149.46 yen in late trade, the lowest since Oct.

21, under pressure after Japan's government finalised a stimulus

budget and inflation in Tokyo came in hotter than economists

expected.

The dollar index, which measures the currency against

six major rivals, fell 0.26% to 105.79, ending the week 1.4%

lower thanks to a sudden rebound for the euro, which had been

lurching towards the key $1 marker on tariff fears and a bleak

euro zone outlook

The outlook for lower U.S. rates has also weighed on the

dollar. Trump's import tariffs could boost U.S. inflation,

Federal Reserve officials have turned cautious on rate cuts

while futures traders put odds that the Fed will cut rates

another 25 basis points at December's meeting at 65%. However,

for 2025 they see less chance that the central bank will

continue to bring rates down at the same pace as this year.

"The dollar is a little bit weaker. That's helpful for the

multinationals in the S&P 500," said Quincy Krosby, chief global

strategist, LPL Financial in Charlotte, North Carolina.

Trump has pledged immediate 25% tariffs on all products from

Mexico and Canada when he takes office in January and an

additional 10% on imports from China, a major trading partner

for Asian economies and euro zone export powerhouse Germany.

"President-elect Trump has called out Canada, Mexico, and

China for now, but Europe is not far down the list," strategists

at BCA Research said, recommending investors limit their

exposure to European stocks and favour German government bonds.

The euro wrapped the day up 0.21% at $1.0575. It

has recovered from crushing losses since the Nov. 5 U.S.

election to gain 1.25% this week, supported by data on Friday

showing higher euro zone inflation, limiting bets for deep

European Central Bank rate cuts.

Europe's STOXX share index rose 0.58%, while

Europe's broad FTSEurofirst 300 index rose 12.65

points, or 0.63%. Asian and emerging market stocks sustained the

deepest blows from tariff fears.

While Tokyo's Nikkei 225 index eased a bit on

Friday, it ended November off 2.23%, even though Japan was not

singled out as a tariff target. MSCI's broadest index of

Asia-Pacific shares outside Japan showed a 2.35%

loss for the month.

Traders have fully priced a 25-bps European Central Bank

rate cut to 3% in December, although hawkish remarks from board

member Isabel Schnabel this week dampened speculation about a 50

bps reduction.

The yield on the benchmark U.S. 10-year notes

fell 6.8 basis points to 4.174%. Investors bought government

bonds this week after Trump nominated hedge fund manager and

Wall Street veteran Scott Bessent for Treasury Secretary, easing

fears about excessive U.S. borrowing.

U.S. crude fell 0.42% to $68.43 a barrel and Brent

fell to $73.06 per barrel, down 0.3% on the day after

the Israel-Hezbollah ceasefire deal in Lebanon eased supply

fears, while gold rose 0.42% to $2,652.09 an ounce.

In cryptocurrencies, bitcoin gained 2.23% to

$97,252.72.