MOSCOW (Reuters) - Russia was short of around 4.8 million workers in 2023 and the problem will remain acute in 2024, the Izvestia newspaper reported on Sunday, citing experts and research from the Russian Academy of Science's Institute of Economics.

Central Bank Governor Elvira Nabiullina said last month that Russia's depleted labour force was causing acute labour shortages and threatening economic growth as Moscow pumps fiscal and physical resources into the military.

Hundreds of thousands of Russians left the country following what the Kremlin calls its special military operation in Ukraine which began in February 2022, including highly-qualified IT specialists.

Those who took flight either disagreed with the war or feared being called up to fight in it.

The outflows intensified after President Vladimir Putin, who earlier this month lauded a historically low jobless rate of 2.9%, announced a partial military mobilisation of around 300,000 recruits in September 2022.

Putin has said he sees no need for a new wave of mobilisation for now.

Izvestia, citing the author of the research, Nikolai Akhapkin, said that labour shortages had sharply increased in 2022 and 2023. It said that drivers and shop workers were in particularly high demand.

According to official data, cited by the newspaper, the number of vacancies in the total workforce rose to 6.8% by the middle of 2023, up from 5.8% a year earlier.

"If we extend the data presented by Rosstat (the official statistics agency) to the entire workforce, the shortage of workers in 2023 will tentatively amount to 4.8 million people," the newspaper cited the new research as saying.

It noted that Labour Minister Anton Kotyakov had said that workforce shortages were felt hard in the manufacturing, construction and transportation sectors, forcing companies to raise wages to try to attract more employees.

The newspaper cited Tatyana Zakharova of Russia's University of Economics named after G.V. Plekhanov as saying that the labour shortages would probably persist next year, as vacancies for factory workers, engineers, doctors, teachers and other professions would he especially hard to fill.

She cited poor demographics and "the migration of the population" as among the reasons for the labour shortages.

By Siyi Liu and Dominique Patton

BEIJING (Reuters) - This Dec. 21 story has been corrected to clarify that the ban was on the export of technology to make rare earth magnets and that the ban on technology to extract and separate critical materials was already in place, in paragraphs 1 and 6. It also removes context and the comment on rare earth processing operations, in paragraphs 3 and paragraphs 18-20.

China, the world's top processor of rare earths, banned the export of technology to make rare earth magnets on Thursday, adding it to a ban already in place on technology to extract and separate the critical materials.

Rare earths are a group of 17 metals used to make magnets that turn power into motion for use in electric vehicles, wind turbines and electronics.

"This should be a clarion call that dependence on China in any part of the value chain is not sustainable," said Nathan Picarsic, co-founder of the geopolitical consulting firm Horizon Advisory.

China's commerce ministry sought public opinion last December on the potential move to add the technology to prepare smarium-cobalt magnets, neodymium-iron-boron magnets and cerium magnets to its "Catalogue of Technologies Prohibited and Restricted from Export."

In the list it also banned technology to make rare-earth calcium oxyborate and production technology for rare earth metals, adding them to a previous ban on production of rare earth alloy materials.

The catalogue's stated aims include protecting national security and public interest.

China has significantly tightened rules guiding exports of several metals this year, in an escalating battle with the West over control of critical minerals.

It introduced export permits for chipmaking materials gallium and germanium in August, followed by similar requirements for several types of graphite since Dec. 1.

"China is driven to maintain its market dominance," said Don Swartz, CEO of American Rare Earths, which is developing a rare earths mine and processing facility in Wyoming. "This is now a race."

WEST STRUGGLES

The move to protect its rare earth technology comes as Europe and the United States scramble to wean themselves off rare earths from China, which accounts for nearly 90% of global refined output.

China has mastered the solvent extraction process to refine the strategic minerals, which MP Materials and other Western rare earth companies have struggled to deploy due to technical complexities and pollution concerns.

Shares of MP, which has slowly begun increasing rare earths processing in California, jumped more than 10% on Thursday after China's move. The company did not immediately respond to requests for comment.

Ucore Rare Metals said on Thursday that it had finished commissioning of a facility to test its own rare earths processing technology, which is being funded in part by the U.S. Department of Defense.

"New technologies will be needed to outmaneuver the Chinese grip on these important areas," said Ucore CEO Pat Ryan. Ucore's stock rose more than 16%.

It is not clear to what extent China's rare earths technology is actually being exported. Beijing has discouraged its export for years, said Constantine Karayannopoulos, former CEO of Neo Performance Materials, which separates rare earths in Estonia.

"This announcement just formalises what everyone knew to be the case," Karayannopoulos said.

By Tom Westbrook

SINGAPORE (Reuters) -Chinese internet stocks slumped on regulatory news on Friday to drag Asian stocks down for the final full trading week of the year, while the dollar wobbled ahead of U.S. inflation data that's expected to validate bets on rate cuts in 2024.

MSCI's broadest index of Asia-Pacific shares outside Japan gave up gains to trade 0.3% lower after China issued draft rules that would impose spending limits on gamers. For the week the index is down 0.6%.

Netease stock was down 29% at one point and Tencent shares more than 12%, pulling the Hang Seng 1.2% lower.

"It's not necessarily the regulation itself - it's the policy risk that's too high," said Steven Leung, executive director of institutional sales at broker UOB Kay Hian in Hong Kong.

"People had thought this kind of risk should have been over and had started to look at fundamentals again. It hurts confidence a lot."

Banking shares helped Japan's Nikkei rise 0.2%. The euro poked above $1.10.

Outside Asia, markets have been in a festive mood for weeks as inflation data around the world has showed a slowdown and the Federal Reserve signalled it was done raising interest rates.

Two-year U.S. Treasury yields are down almost 38 basis points in a week and a half and fell 2 bps overnight when third-quarter U.S. core PCE inflation was revised down to 2%.

The data has markets girding for a downside surprise on the last key number before Christmas, November's personal consumption expenditure index, due at 1330 GMT with consensus expectations for a monthly increase of 0.2%.

"Analysts are confident it shouldn't be higher than 0.2%," said National Australia Bank (OTC:NABZY)'s head of currency strategy Ray Attrill in Sydney.

"Could we get 0.1%? It'd probably take a 0.1% to see and extension of the moves we have seen."

Overnight U.S. stocks bounced back from a sudden slide at the end of Wednesday's session and the S&P 500 rose 1%.

The index is within 2% of its record high.

S&P 500 futures dipped 0.1% in Asia and Nike (NYSE:NKE) shares slid almost 12% in after-hours trade after the company cut its sales forecast, blaming cautious consumers.

European futures were flat.

Oil is set for a weekly gain on nervousness about the security of Red Sea shipping, but prices fell overnight after Angola said it would quit OPEC, raising questions about the producer group's efforts to limit global supply. [O/R]

Brent crude futures were up 58 cents to $79.97 a barrel in Asia trade on Friday, for a weekly gain of 4.5%.

TALE OF TWO HAVENS

In currency trade the dollar has come under pressure from markets' expectation of more than 150 bps of rate cuts in 2024.

At $1.1002 the euro is up 1% this week, even though a similar amount of cuts are priced in for Europe next year. The common currency is also up about 1% against sterling, which fell sharply this week after a surprise dive in inflation.

Sterling was set for its biggest weekly drop on the euro and against the Aussie dollar for three months. It last bought $1.2686 and traded at 86.71 pence per euro.

The dollar index is down 0.7% this week to 101.85. For the year it is down 2.4%. Among G10 currencies the best performer of the year was the Swiss franc, up nearly 8% on the dollar, while the yen's 7.8% drop made it the worst.

NAB's Attrill noted the mirror moves of the two so-called "safe haven" currencies underscored the overwhelming influence of the Bank of Japan's (BOJ) monetary policy. It has stuck with negative interest rates while the rest of the world has hiked.

The dollar rose marginally to 142.43 yen on Friday.

Gold is set to end the week and the year ahead, with a 12% gain so far this year to $2,049 an ounce.

Bitcoin is up 160% this year to $44,114.

SEOUL (Reuters) - South Korea's parliament on Thursday approved increasing next year's budget by a net 17.9 trillion won to 656.6 trillion won ($503.50 billion).

The increase is the smallest in two decades as authorities prioritise fiscal discipline in a U-turn from expansionary expenditure made during the coronavirus pandemic, according to the nation's finance ministry.

By restraining spending, President Yoon Suk Yeol's administration plans to bring the ratio of fiscal deficit to GDP back below 3% from 2025.

The 656.6 trillion won of fiscal expenditure penciled in for next year will widen the deficit-to-GDP to 3.9% from an estimated 2.6% this year.

($1 = 1,304.0700 won)

By Rae Wee

SINGAPORE (Reuters) - The dollar languished near a more than four-month low on Friday ahead of a reading on a key U.S. inflation gauge due later in the day, which will provide further clarity on how much room the Federal Reserve has to cut interest rates next year.

The greenback hit a five-month trough against the New Zealand dollar and a three-week low against the euro in early Asia trade, resuming its decline after a sudden bout of risk aversion in New York hours on Wednesday led to a selloff in U.S. stocks and a rise in the dollar.

The kiwi was last 0.03% higher at $0.6296 after hitting a session high of $0.6298, while the euro peaked at $1.10125.

Focus now turns to Friday's U.S. core personal consumption expenditures (PCE) print - the Fed's preferred measure of underlying inflation - for clues on how far inflation in the world's largest economy is slowing.

Expectations are for the core PCE price index to have risen 3.3% on an annual basis, as compared to October's 3.5%.

"The distribution for U.S. inflation is now considered skewed and one-sided, with a high probability of lower levels," said Chris Weston, head of research at Pepperstone.

"Hence, the Fed has increased scope to ease policy should the need arise, and while Fed officials are saying their work is not done, and the last push to get to its 2% inflation target is the hardest part, they can front load cuts far more efficiently when core PCE is at 3.5% and falling."

Against a basket of currencies, the greenback was last at 101.76, pinned near a more than four-month low of 101.72 hit in the previous session.

The dollar index was on track for a weekly loss of about 0.8% and looked set to extend last week's 1.3% decline, after the Fed left the door open to rate cuts next year at its last policy meeting for 2023.

The Australian dollar dipped 0.09% to $0.6797, though remained not too far from its five-month high of $0.68035 first hit on Thursday.

Sterling was little changed at $1.26905 and was headed for a marginal weekly gain, pressured by British inflation data out this week that came in well below expectations.

"As inflation edges closer to target, the market will have an increased tendency to disregard hawkish comments from policymakers," said Jane Foley, senior FX strategist at Rabobank. "This is likely to be particularly the case in the UK in view of the weakness of the economic outlook."

In Asia, the yen last stood at 142.09 per dollar, unfazed by Friday's data that showed Japan's core consumer prices rose 2.5% in November from a year earlier, marking the slowest pace of increase in over a year and taking pressure off the Bank of Japan (BOJ) to phase out its massive stimulus.

The Japanese currency looked set to end the week largely unchanged, after the BOJ had, earlier this week, maintained its ultra-loose policy settings and offered few hints on when it could move away from negative interest rates.

Investing.com -- U.S. stock markets slump as a December rally pauses, while Treasury yields dip as traders stick to bets that the Federal Reserve will roll out interest rate cuts early next year. Elsewhere, Micron (NASDAQ:MU) delivers a stronger-than-anticipated current-quarter revenue outlook, fueling a premarket jump in shares in the closely-watched memory chipmaker.

1. Futures higher after stocks slip

U.S. stock futures were higher on Thursday, pointing to a rebound in equities following a day of losses on Wall Street in the previous session.

By 04:57 ET (09:57 GMT), the Dow futures contract had added 192 points or 0.5%, S&P 500 futures had risen by 27 points or 0.6%, and Nasdaq 100 futures had gained 124 points or 0.7%.

The main averages retreated in an afternoon sell-off on Wednesday, with the tech-heavy Nasdaq Composite snapping a nine-day winning streak and the benchmark S&P 500 slipping to its biggest one-day fall in three months. Analysts said a recent rally in stocks, which had been charged by investor hopes for Federal Reserve interest rate reductions early next year, hit resistance levels.

"This could be due to an overbought market as rate cuts optimism ran out of steam," said Tina Teng, market analysts at CMC Markets, in a note.

Adding to the downbeat sentiment was a disappointing annual forecast from logistics group FedEx (NYSE:FDX). Shares in the parcel deliverer, which is often seen as a bellwether for the state of the U.S. economy, slumped by more than 12%.

2. U.S. Treasury yields fall

The nose-dive on Wall Street came despite a drop in U.S. Treasury yields, which touched five-month lows on Wednesday on enthusiasm for Fed rate cuts.

Bets that the Fed will move to slash rates from over two-decade highs in the spring have grown since last week, when the central bank hinted that it may soon embark on a dovish policy pivot. According to Investing.com's Fed Rate Monitor Tool, there is a more than 68% chance that the Fed will lower borrowing costs by 25 basis points as early as March.

These expectations were bolstered by Philadelphia Fed President Patrick Harker, who told a local radio station that officials "don't need to raise rates anymore." Harker added that the outlook for inflation was improving after a post-pandemic period of red-hot price growth.

His statements suggested that loosening in policy may be coming in 2024, although some members of the rate-setting Federal Open Market Committee have attempted to temper such predictions in recent days.

3. Micron's upbeat forecast

Shares in Micron climbed in premarket trading in New York on Thursday after the memory chipmaker unveiled a better-than-expected second-quarter revenue forecast.

Idaho-based Micron said that now sees revenue at $5.3 billion, plus or minus $200 million, during the period, topping Bloomberg consensus estimates of $4.99B.

In prepared remarks, Chief Executive Sanjay Mehrotra said the outlook was boosted by "a strong inflection in industry pricing" that will allow the company "to benefit from higher prices" next year and into 2025.

Aiding Micron has been soaring hype around generative artificial intelligence. The trend has boosted corporate demand for the firm's high-bandwidth memory chips that help power the large language models underpinning AI technology.

"We are in the very early stages of a multi-year growth phase catalyzed and driven by generative AI, and this disruptive technology will eventually transform every aspect of business and society," Mehrotra noted.

4. Paramount, Warner Bros Discovery in early merger talks - reports

Warner Bros Discovery (NASDAQ:WBD) and Paramount Global have discussed a potential tie-up that would bring two of the world's largest media companies, according to multiple media reports.

Citing people familiar with the matter, reports said that Warner Chief Executive David Zaslav and his counterpart Bob Bakish at Paramount held talks at a lunch in New York this week. The sources warned news outlets that these were early stage discussions and may never materialize.

Axios, which first reported on the talks, said that the companies were considering a deal that would see Warner Bros buy either Paramount Global or its parent National Amusements Inc.

A possible merger was widely viewed as a move by Warner and Paramount to shore up profitability and lower costs during a time of fierce competition from streaming rival Netflix (NASDAQ:NFLX).

5. Oil rises amid trade disruption fears

Oil prices edged up on Thursday as concerns remained over global trade disruptions due to tensions in the Middle East.

By 04:58 ET, the U.S. crude futures traded 0.4% higher at $74.50 a barrel, while the Brent contract climbed 0.4% to $79.97 per barrel.

Gains were limited, however, after the Energy Information Administration announced on Wednesday that U.S. crude inventories rose by 2.9 million barrels last week, compared with expectations for a 2.3 million barrel drop. The figures served to exacerbate worries over demand in the world’s largest consumer.

The EIA also said U.S. crude output increased to a record 13.3 million barrels per day last week, up from the prior all-time high of 13.2 million barrels.

Crude prices have surged this week after shipping operators announced plans to avoid the Suez Canal following attacks by the Iran-backed Houthi group on vessels in the Red Sea, potentially impacting oil supplies to the important Asian market.

By Dan Burns

NEW YORK (Reuters) - As 2024 comes into view, investors, economists, business leaders and everyday consumers from London to Lyons to Los Angeles share a common hope: Let the interest rate cuts begin!

Central banks from most major developed economies closed out 2023 with a blitz of policy meetings in December that effectively shut the books on the aggressive rate hikes that have dominated the economic and financial landscape since 2022. The lone outlier, the Bank of Japan (BOJ), never managed to kill off its negative rates policy and signaled this week at the year's final meeting of a Group of Seven central banks that a shift away from that stance was not imminent.

Allowing the rest of the big central banks to call time on rate hikes was the favorable turn inflation took over the course of 2023. After starting the year with annual inflation rates that were on average 3.7 times the 2% target shared by the U.S. Federal Reserve, European Central Bank (ECB), Bank of England, Bank of Canada and BOJ, the pace of price increases is now down to 1.5 times that target.

Of course that means more work to do to complete the "last mile" in the inflation fight. Central bankers are loathe to declare victory prematurely and are battling with over-eager financial markets to retain maximum optionality, prompting the drum beat of pledges to hold rates high for a longer period or raise them again if necessary - the latter in particular being seen increasingly as an empty threat.

Inflation, however, does not need to drop all the way to 2% in order for rate cuts to begin, and 2-handle inflation rates could soon be the norm.

WHY IT MATTERS

Holding rates steady as inflation rates slow further is another form of policy tightening that may not be appropriate for much longer.

That is something some Fed officials have begun openly bandying about as a reason for the rate cuts they flagged last week as being in the cards next year, especially if they hope to deliver a "soft landing" for the U.S. economy.

Keeping rates restrictive for longer than necessary risks a harsher outcome, one featuring a rapid slowdown in economic activity, a painful rise in unemployment and a recession that much of the world has managed to dodge so far despite that scenario being the more traditional end to rate-hike cycles.

Rate-sensitive economic sectors everywhere - such as housing and manufacturing - have felt the pinch of higher rates for more than a year.

While services activity generally has continued to expand, S&P Global's measure of manufacturing activity in developed economies has been in contraction since October 2022, although there are indications the worst may be over with the latest reading at the highest level since the spring. Emerging market factory output, which has been at stall speed for much of 2023, also edged higher.

WHAT IT MEANS FOR 2024

A major game of chicken is underway as market actors have set expectations for far more policy easing than central bankers are likely to be willing to provide.

For instance, while last week's projections from Fed officials themselves indicated they expect 75 basis points of rate reductions over the course of 2024, bond and rate futures markets are now positioned for twice that amount. That led at least one U.S. central bank official, Chicago Fed President Austan Goolsbee, to confess that he was "confused" by the market's behavior.

Across the Atlantic, meanwhile, sources familiar with the matter told Reuters it is unlikely that the ECB will be in position to cut rates before June, three months later than market pricing there now reflects.

The key to it all, of course, rests with inflation since policymakers have said they are willing to stomach some level of economic pain, if necessary, to finally return price pressures to their target levels.

Politics may play a hand as well, with general elections scheduled for later in the year, in the U.S and UK in particular. Central bankers who prize their political independence may not want to be seen taking major action too close to elections lest they be accused of trying to tip the outcome.

And as the year closed, a potential new spoiler was emerging that could complicate the rate-cut thesis: Attacks by Iran-backed Houthi rebels on cargo vessels in the Red Sea forced shippers to halt or reroute traffic, a supply chain hiccup that could impede further swift progress on inflation.

By Julie Zhu

HONG KONG (Reuters) -Asian shares retreated on Thursday after Wall Street snapped a long winning streak, while Treasury yields were near five-month lows on hopes Britain's notably soft inflation reading would be echoed in looming U.S. price data.

The equities rally, which had been driven by falling interest rates and the Federal Reserve's dovish turn, stalled on Thursday even after U.S. economic data that beat expectations initially turned the major indexes green. A far steeper-than-expected decline in British inflation also took markets by surprise.

"Three US benchmark averages sharply retreated in the late session after hitting their respective intraday highs, snapping a more-than-one-week winning streak. This could be due to an overbought market as rate cuts optimism ran out of steam," said Tina Teng, market analyst at CMC Markets (LON:CMCX).

"Global government bond yields accelerated falling due to risk-off sentiment."

European markets were set for a lower open, with the pan-region Euro Stoxx 50 futures down 0.48%, German DAX futures dipping 0.44% and FTSE futures falling 0.57%.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3%, after U.S. stocks tumbled to close sharply lower in the previous session. The index is up 1.7% so far this month.

U.S. stock futures, the S&P 500 e-minis, were up 0.33%.

Australian shares were down 0.45%, dragged down by losses in commodity-related stocks, while Japan's Nikkei stock index slid 1.55%, slipping from near historical highs.

China's blue-chip CSI300 index rose 1.25%, rebounding from a near five-year low hit in the previous session. Foreign investors have been net buyers of Chinese shares so far on the day, following two sessions of selling.

Hong Kong shares tracked global markets lower in morning trade but the benchmark Hang Seng Index gained 0.14% in the afternoon.

On Wednesday, an abrupt mid-afternoon nosedive ended Wall Street's impressive rally.

All three major U.S. stock indexes, which were at or near record highs this week, veered lower late in the session to end 1.3% to 1.5% below Tuesday's close. The Dow Jones Industrial Average fell 1.27%, the S&P 500 lost 1.47% and the Nasdaq Composite dropped 1.5%.

In U.S. Treasuries, the yield on benchmark 10-year Treasury notes reached 3.8676% compared with its U.S. close of 3.877% on Wednesday when it fell to an almost five-month month low as government bond yields fell globally after the British inflation data.

The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 4.3705% compared with a U.S. close of 4.369%.

In currencies, the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was down at 102.29. The greenback on Wednesday strengthened against sterling after the British inflation data fuelled speculation of rate cuts by the Bank of England.

Sterling was last trading at $1.2646, up 0.06% on the day, while the euro was up 0.1% at $1.095.

In commodities, global oil benchmark Brent hovered above $80 a barrel amid jitters over global trade disruptions and geopolitical tensions in the Middle East following attacks on ships in the Red Sea by Yemen's Iran-aligned Houthi forces.

Brent crude was last trading at $79.62 per barrel and U.S. crude dipped 0.11% to $74.14 a barrel.

Gold was slightly higher. Spot gold was traded at $2036.19 per ounce. [GOL/]

BEIJING (Reuters) - China announced on Thursday the end of tariff cuts on some chemical imports from Taiwan, accusing the island of violating a trade agreement, as Beijing keeps up its pressure on Taipei ahead of elections next month.

Taiwan's Jan. 13 presidential and parliamentary elections are taking place as China, which views the island as its own territory, has sought to force Taiwan to accept Chinese sovereignty claims.

Taiwan's government and the ruling Democratic Progressive Party (DPP) have repeatedly said China is trying to interfere in the vote, whether by military means or co-opting Taiwanese politicians, to ensure an outcome favourable to Beijing.

China's Finance Ministry said that from Jan. 1 tariff cuts will be suspended for 12 products, including acrylic and p-xylene, citing "discriminatory prohibitions and restrictions" Taiwan imposed on Chinese exports in violation of a 2010 trade deal.

"It is hoped that Taiwan will take effective measures to lift trade restrictions on the mainland," it said.

China last week said it had determined Taiwan had put up trade barriers in contravention of both World Trade Organization (WTO) rules and the 2010 trade deal.

Taiwan has called on China to stop its "political operations" with the trade probe, and said it is ready to discuss the issue with Beijing.

By Takaya Yamaguchi and Tetsushi Kajimoto

TOKYO (Reuters) -Japan's government aims to reduce its budget next fiscal year for the first time in 12 years, highlighting concerns over the massive public debt of the world's third-largest economy, a draft of the 2024-25 budget reviewed by Reuters showed.

The budget is estimated to come to 112.1 trillion yen ($782 billion), compared with the initial 114.4 trillion yen set out in this fiscal year's budget, reflecting the government's will to restore the tattered public finances and revive a lacklustre economy.

Decades of stop-start fiscal spending and reform have left Japan with the industrial world's heaviest public debt burden - double the size of its economic output. It is now fighting to achieve an even tougher goal of a balanced budget, excluding new bond sales and debt-servicing costs, by the fiscal year ending in March 2026.

Tax revenue for fiscal 2024-25 is estimated to come to 69.6 trillion yen, slightly overshooting this year's estimate at 69.4 trillion yen, which would be a record amount if corporate profits recover and wage growth spreads.

Next year the government plans to forego paying into a to boost defence spending in the first of several years and reduce its 5 trillion yen emergency budget so as not to squeeze its annual spending.

The government plans to trim new bond issuance for a third straight year, counting on tax revenue growth and spending cuts. Fresh borrowing would stand at around 34.9 trillion yen, down from 35.6 trillion yen for this year's initial amount.

Finance ministry officials were not immediately available for comment.

The budget draft will be compiled on Friday before being sent to parliament for debate and approval by the start of next fiscal year starting in April.

($1 = 143.4200 yen)