Treasuries rallied in London trade on Monday as bond investors cheered the selection of fund manager Scott Bessent as a candidate for U.S. Treasury secretary, reckoning on a steady hand on government finances.

Bessent is seen as a voice for markets in incoming U.S. President Donald Trump's administration and as a fiscal conservative who would keep a leash on U.S. deficits.

Benchmark 10-year U.S. Treasury yields, up 80 basis points since September, fell 6.5 basis points to 4.34%, after hitting 4.326%, the lowest level since Nov. 12.

"The market view is that Bessent is a 'safe hands' candidate," said Stephen Spratt, strategist at Societe Generale.

Bessent said "in August that attacking the U.S. national debt should be a priority, which includes slashing government programs and other spending," Spratt said.

Markets have fretted for weeks about a potential rebound in inflation and an increase in the federal budget deficit from Trump's economic plans, such as tax cuts and import tariffs.

Two-year yields fell 2.5 bps to 4.34% and 30-year yields were down 7 bps at 4.52%.

Yields fall when bond prices rise.

If sustained, the rally would be one of the biggest for the bond market in several weeks and may have wrong-footed momentum funds following months of rising yields.

"My sense is that this (rally) is also a function of positioning after the rise in yields and dollar strength over the last six weeks," said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.

Pricing for near-term interest rate cuts in the United States, which has pushed out over recent weeks on signs of a strong U.S. economy, was little changed in Asia.

Markets price about a 50% chance of a 25 basis point cut at the U.S. Federal Reserve's December meeting.

(Reporting by Tom Westbrook and Stefano Rebaudo; Editing by Kate Mayberry and Emelia Sithole-Matarise)