Asian stocks witnessed a notable climb on Monday, with the market being influenced by various factors. The record high closes on Wall Street provided a significant boost, while the dollar showed a rebound against the yen and British pound. In China, shares received an additional lift from a robust private manufacturing survey, aligning with the official data. Incoming U.S. President Donald Trump's warning to BRICS nations against replacing the greenback also supported the dollar. Kyle Rodda, senior financial markets analyst at Capital.com, identified two main drivers of market volatility this month - the impact of Trump and the U.S. Federal Reserve's policy decisions.

Market Drivers and Volatility

The euro faced challenges due to the risk of a potential collapse of the French government. Prime Minister Michel Barnier was confronted with a Monday deadline to make more budget concessions or face a no confidence vote. In Hong Kong, the Hang Seng gained 0.9%, and mainland Chinese blue chips added 0.6%. The Caixin/S&P Global manufacturing PMI rose in November, indicating growth in the manufacturing sector and suggesting the effectiveness of stimulus measures in the world's second-largest economy.In Australia, the stock benchmark gained 0.3%, approaching last week's record high. South Korea's KOSPI also advanced 0.3%. However, Japan's Nikkei declined 0.3%, dragged down by a significant drop in Fast Retailing. The broader Topix index, on the other hand, climbed 0.4%. Japanese government bond yields climbed to a 16-year high after Bank of Japan Governor Kazuo Ueda's comments about an approaching rate hike. Market-implied odds of a quarter-point increase this month stood at around 64%.The dollar index, which measures the currency against six major rivals, rose 0.2% to 106.23. The dollar climbed 0.5% against the yen, bouncing back from Friday's low. Sterling slid 0.4% against the dollar after reaching a high on Friday. The euro sank 0.4% against the dollar.France's far-right National Rally lawmaker Marine Le Pen emphasized the importance of Barnier making further budget concessions to avoid a government collapse. The outlook for monetary policy also weighed on the single currency, with the European Central Bank expected to cut rates and the Federal Reserve in focus as well. A number of Fed officials are set to speak this week, including Fed Chair Jerome Powell on Wednesday. Traders currently anticipate a quarter-point reduction with about 66% odds.On Friday, the S&P 500 and Nasdaq added 0.6% and 0.8% respectively to close at all-time highs. S&P 500 futures pointed to a slightly lower reopen on Monday. In cryptocurrencies, ether rose towards a nearly six-month peak, while Bitcoin edged up and inched back towards its record high. Gold sank 0.7% under pressure from the strong dollar. Oil prices edged up, supported by the Chinese manufacturing data and Israel's resumption of attacks on Lebanon despite a ceasefire agreement. Brent crude futures climbed 11 cents, and U.S. West Texas Intermediate crude was up 14 cents.