By David Lawder and Ann Saphir

SAN FRANCISCO (Reuters) - U.S. Treasury Secretary Janet Yellen on Monday said negotiations on the trade section of Indo-Pacific Economic Framework will need further work, a setback for the Biden administration which had hoped to announce substantial completion this week.

Yellen told a news conference there has been "very substantial progress" on three of the four areas under discussion by the 14 IPEF member countries, but there are "remaining issues" on trade."

A centerpiece of the Biden administration's efforts to deepen economic ties with Asian nations and counter China's rising dominance in the Pacific, the IPEF is a forum for multilateral talks aimed at forging agreements in a range of areas, including trade.

She said there had been "significant progress" on the trade pillar, "but it looks not to be complete, like something that is likely to require further work."

"My understanding is that very substantial progress has been made on three of the four pillars" of the talks, she said, referring to talks on supply chains, the climate transition, and anti-corruption.

Yellen's comments on the trade pillar were in line with those of people familiar with the talks, who told Reuters that talks on improving labor and environmental standards, and ways to enforcement compliance have run into resistance from some member countries.

The Biden administration had hoped to announce some outcomes on the trade pillar this week as leaders of Asia Pacific Economic Cooperation (APEC) countries gather in San Francisco.

U.S. President Joe Biden is eager to portray IPEF as producing meaningful outcomes to IPEF countries, which are mostly APEC members, as he seeks to offer Asia a U.S.-led alternative to deeper economic ties to China.

By David Lawder

SAN FRANCISCO (Reuters) -U.S. Treasury Secretary Janet Yellen called on Pacific Rim finance ministers on Monday to boost the productive capacity of their economies while working to finance the transition to low-carbon energy and provide more opportunities for the poor.

Opening a meeting of finance ministers of Asia Pacific Economic Cooperation countries, Yellen said the group's economic dynamism meant the actions they take matter for addressing global challenges.

Yellen said in prepared remarks that the 21 APEC economies needed to collaborate to meet goals for the 2023 U.S. hosting year of creating an "open, dynamic, resilient, and peaceful Asia-Pacific community."

A day after the APEC Secretariat issued new forecasts for slowing growth next year citing the inflation fight and U.S.-China tensions, Yellen said the group needed to increase potential output.

"We need to further improve our long-term economic outlook by boosting labor supply, innovation, and infrastructure investment, in ways that are also sustainable and reduce inequality," Yellen said.

"We need to put ourselves on a sustainable growth path, one where we safeguard our planet while providing our economies with the clean energy they need to grow. And we need to leverage emerging technologies to drive innovation while maintaining safe financial markets," Yellen added.

Treasury released a research paper saying expenditures to reduce carbon emissions now would reduce costlier damages from more frequent and powerful storms, floods and forest fires.

It cited research estimating that spending $50 billion per year to build higher bridges and move transportation routes inland for 136 coastal cities around the world would reduce expected annual economic losses from climate change in 2050 by nearly $1 trillion.

The APEC finance ministers meeting precedes the APEC leaders' summit this week and a high-stakes meeting between U.S.-President Joe Biden and Chinese President Xi Jinping aimed at easing tensions between the world's two largest economies.

On Friday, Yellen agreed with her Chinese counterpart, Vice Premier He Lifeng, to "intensify communication", while warning Beijing's new economic czar to crack down on Chinese that are aiding Russia's Ukraine war effort.

The agenda for the meeting includes bringing more workers into APEC country workforces, investments in infrastructure and research and mobilizing resources to accelerate net-zero emissions goals. Yellen cited the Just Energy Transition Partnerships for Vietnam and Indonesia, financed by G7 countries, multilateral development banks and private sector investors as prime examples.

The meeting also includes discussions on developing carbon markets and Treasury's principles for financial firms' net-zero pledges that will require their lending and investments to align with goals to limit the global temperature increase to 1.5 degrees Celsius by mid-century, "responsible development" of digital assets.

Yellen is due to hold a closing news conference on Monday evening.

ISLAMABAD - Pakistan's interim administration has reached a key agreement with the International Monetary Fund (IMF) on an annual tax collection target of Rs 9,415 billion, a move that underscores the country's commitment to its economic goals without imposing new taxes. This understanding comes as part of the ongoing discussions under a $3 billion standby arrangement (SBA) that has already helped Pakistan stave off a potential sovereign debt default since July.

The IMF's mission chief, Nathan Porter, praised Pakistan for its progress towards economic recovery and adherence to first-quarter targets. The Federal Bureau of Revenue (FBR) has outlined comprehensive strategies to expand the tax net and meet the ambitious tax collection goals set by the IMF. These strategies include plans to combat tax evasion in the real estate sector, which is a significant step forward in enhancing administrative practices.

Dr. Shamshad Akhtar, the caretaker Finance Minister, has assured that there will be no additional tax burdens on citizens and highlighted the government's focus on fiscal prudence to control the budget deficit. She also discussed fiscal measures and strategies to address the issue of circular debt in the power sector with IMF representatives.

The IMF delegation began their assessment last week for the second tranche of the SBA loan, which is expected to continue until December 15. A positive review could release an additional $710 million for Pakistan in December. Dr. Akhtar expressed optimism about these discussions and emphasized the IMF's confidence in the caretaker government's program, which includes development expenditures aimed at improving the country's economic condition.

The agreement between Pakistan and the IMF signifies an important stride in Pakistan's economic strategy, with both parties acknowledging each other's efforts. The caretaker government's commitment to no new taxes and focus on administrative enhancements have been pivotal in these negotiations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

A look at the day ahead in European and global markets from Kevin Buckland

Chip stocks gave Asian equity investors some small bit of cheer to start the week, picking up where Wall Street left off while U.S. yields stayed subdued, which kept a lid on the dollar, too.

But elsewhere, bears were firmly in control.

A lot of that can likely be traced to China, rather than to the Moody's (NYSE:MCO) downgrade to the outlook for the U.S. sovereign debt rating, which investors have taken in stride.

The Chinese consumer has so far refused to ride to the rescue of the world's second-largest economy. Monthly retail sales data is due on Wednesday but the country's Singles Day shopping extraganza over the weekend - equivalent to Black Friday sales elsewhere - recorded only meagre growth.

Looking across the region, Japan's tech-heavy Nikkei managed to keep its head above water, buoyed by gains for its two biggest chip-related shares; Taiwan's benchmark advanced 0.8%.

But Hong Kong flipped from early gains to a loss of about 0.15%. A sub-index of tech shares remained firmly positive but another of mainland property developers slumped more than 1%.

China's blue chips fell 0.5%.

U.S. retail sales data is also due on Wednesday, preceded by CPI a day earlier. The figures could be key in helping the Federal Reserve to plot the path ahead for interest rates, including whether another hike is needed.

The Fed's rhetoric has taken a hawkish turn recently, but markets so far are more focused on the data, particularly the soft non-farm payrolls numbers at the start of this month.

ECB President Christine Lagarde last week said that rates will stay restrictive at least for several quarters. Lagarde deputy Luis de Guindos has his say a little later today, giving the keynote speech to kick off Euro Finance Week.

Elswhere, Bank of England board member Catherine L. Mann will take the podium, after the bank's chief economist, Huw Pill, said last week its projection that monetary policy will need to remain restrictive for an extended period should not be taken as a promise.

Key developments that could influence markets on Monday:

-ECB's de Guindos, BoE's Mann speak

-UK Rightmove (OTC:RTMVY) house prices

-Sweden SEB housing

-New York Fed consumer expectations survey

By Byron Kaye and Rishav Chatterjee

(Reuters) - Australia's No. 4 lender ANZ said on Monday that surging demand for its institutional banking services propelled its annual profit to a record but an aggressive campaign to sell more mortgages flattened its margin, sending its shares lower.

As Australia's banks redirect focus away from their traditional earnings engine of mortgages where interest rate hikes have spurred competition, ANZ has benefited from an institutional payments platform that it says processes some of the world's biggest cross-border transactions.

That pushed operating income from the bank's institutional unit in front of its retail unit, by dollar value, from March to September, and helped the Melbourne-listed company grow annual profit 14% to A$7.4 billion ($4.7 billion), just missing a Visible Alpha consensus forecast of A$7.56 billion.

But analysts expressed concern about a faster-than-expected narrowing of profit margin from the bank's retail unit, the only one of Australia's so-called "big four" lenders which has persisted with offering cash handouts to lure mortgage customers looking for a cheaper deal.

Even as ANZ's institutional division grew its net interest margin (NIM) - the interest it collects on loans minus interest paid to deposit-holders - the bank's overall NIM declined 10 basis points to 1.65% in the six months to September, more than NIMs reported this month by rivals Westpac and National Australia Bank (OTC:NABZY).

ANZ shares were down 3.1% by midsession, against a flat overall market, amid worries about whether the bank was sacrificing profitability for mortgage volume which had lagged in previous years.

"We expect questions to be raised about margin/volume management in the Australia retail division, particularly due to NIM pressure stemming from ANZ's relatively aggressive growth in Australia home lending," E&P Capital analyst Azib Khan said.

ANZ CEO Shayne Elliott denied forgoing margin to grow mortgages faster than the market, and challenged comments from other banks which have said they were intentionally slowing mortgage growth while competition eroded profit.

"The fact that others have stepped back from the market: I think there's a lot of people rationalising their loss of share," he said on a call with journalists.

"That's for them to answer, not me. All I know is we've been winning more customers than we have historically."

ANZ declared a final dividend of 94 Australian cents per share, up from 74 cents a year ago.

(This story has been refiled to correct typo in the headline)

By Brigid Riley

TOKYO (Reuters) - The dollar was steady on Monday as traders awaited another batch of inflation data from the United States that is expected to offer further clues this week on whether the Federal Reserve has more work to do to tame price pressures.

The Japanese yen remained vulnerable, hovering not far from a one-year low against the greenback as markets remained on watch for possible intervention by Tokyo.

The focus for most traders will be firmly on U.S. consumer price index (CPI) numbers due on Tuesday after the Fed's policy meeting this month tempered its hawkish stance although Fed Chair Jerome Powell last week hinted that the battle against inflation may not be over yet.

Retail sales the following day will also provide more information on the state of demand in the U.S. economy, which has shown signs of resilience in the face of high borrowing cost.

"We expect the USD to remain on a strong footing," Lenny Jin, Global FX Strategist at HSBC, wrote in a note, citing the U.S. economy's continued growth outperformance as one crucial factor.

HSBC expects November U.S. core CPI to remain unchanged compared to last month, "while further disinflation signals may only come in February 2024," said Jin.

Elsewhere, market reaction was muted to news announced shortly before foreign exchange trading closed in New York on Friday that Moody's (NYSE:MCO) lowered its outlook for the U.S. credit rating to "negative".

The dollar index, which measures the dollar against a basket of currencies, was last mostly flat at 105.80.

There was little relief for the yen, however, which has come under pressure from rising U.S. Treasury yields and continued dollar strength.

The Japanese currency was trading around 151.58 yen against the dollar on Monday, just under a one-year low of 151.74 hit at the end of October.

A hot number from one of the U.S. economic data releases this week "would certainly do the trick" in pushing dollar/yen above 151, said Tony Sycamore, a market analyst at IG.

"Alternatively, a continuation of the more supportive risk backdrop would likely entice carry buyers to add to positions and test the measure of the (Bank of Japan)."

Elsewhere, sterling stood at $1.2228 to the dollar, firm ahead of UK average weekly earnings data on Tuesday and a CPI reading on Wednesday.

LONDON (Reuters) - Asking prices for homes in Britain have fallen at their fastest pace in five years for the time of year, property website Rightmove (OTC:RTMVY) said on Monday, underscoring how rising borrowing costs have caused a housing market slowdown.

Average asking prices for homes fell by 1.7% between Oct. 8 and Nov. 4, a bigger fall than is typical for the pre-Christmas period, Rightmove said.

The Rightmove data is not seasonally adjusted.

"Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates," Rightmove director Tim Bannister said.

Britain's housing market boomed during the COVID-19 pandemic but lost much of its momentum as the Bank of England raised interest rates 14 times in a row between December 2021 and August this year. It paused its increases in September.

Rightmove said asking prices were 3% below May's peak while agreed sales were 10% below their pre-pandemic level in 2019, a less severe fall than in the month to early October. There were signs that the shortage of homes for sale was easing with properties for sale only 1% behind their 2019 level, it said.

LONDON (Reuters) - Markets are keen to trade rate cuts and big central banks are pushing back, shining a new light on upcoming data in that tug of war.

China continues to battle its property demons while it is Italy's turn to be in the eye of the ratings agencies.

Here is your week-ahead primer from Lewis Krauskopf in New York, Kevin Buckland in Tokyo, Danilo Masoni in Milan and Alun John and Dhara Ranasinghe in London.

1/ INFLATION WATCH

A slew of Federal Reserve policymakers including boss Jerome Powell say they are still not sure that rates are high enough to finish the battle with inflation.

Traders, anticipating roughly three quarter-point Fed rate cuts next year, will now turn their attention to Tuesday's inflation data to confirm their view on the outlook.

The October consumer price index is expected to have climbed 0.1% on a monthly basis, according to a Reuters poll. September's CPI rose 0.4% on a surprise surge in rental costs, but also showed a moderation in underlying inflation pressures.

A sharper cooling could fan the peak rate talk, fuelled by October's employment report, which pointed to an easing in labor markets.

    A federal government shutdown meanwhile looms if lawmakers in Washington are unable to pass a measure to at least temporarily fund operations before a Nov. 17 deadline.

Fresh wrangling could renew concerns about governance in the world's biggest economy.

2/ TROUBLE AT HOME

    The question of who will be left holding the bag filled with China's property mess may have gone some way to being answered - much to the chagrin of Ping An shareholders.

    Reuters reports that Beijing asked the insurer to take control of ailing Country Garden, China's biggest private developer.

    Ping An shares dived to one-year lows, in spite of the company's denials. Worries about the sector continue to weigh.

Government measures to shore up the economy have repeatedly fallen flat this year, which has not deterred China's central bank from professing the 5% growth target can be achieved, a view the IMF shares.

    Data has pointed the other way, with more evidence of slowing factories and tepid consumption. Markets will see Wednesday if that trend continues, with October retail sales and industrial production data.   

3/ ONCE BITTEN

The robust dollar suddenly appears vulnerable to the push and pull in the market's Fed rate cut bets.

A bounce thanks to Fed chief Powell pushing back on talk that rates have peaked may not last as dollar bears grow confident that rate cuts are likely next year.

Take the latest Reuters poll: nearly two-thirds of analysts say the dollar is likely to trade lower by year-end.

Long dollar positions are decreasing. SocGen reckons dollar/yen could fall back to around 145-150 after trading as high as 151.74 recently.

Rate-cut talk is dollar negative but a sharply slowing U.S. economy that hurts the world could quickly bring back demand for the safe-haven currency.

4/ SUNAK'S SCORECARD

UK inflation has been stickier than in most developed economies.

That is bad news for consumers, the Bank of England, and Prime Minister Rishi Sunak, who pledged at the start of 2023 to halve inflation, then running at over 10%, by year end.

October CPI data, due on Wednesday, will show whether Sunak is starting to get close to that goal. A fall from September's 6.7% is likely, but by how much?

The data could also help justify, or challenge, recent remarks from BoE chief economist Huw Pill that mid-2024 could be the time for rate cuts. Latest British jobs figures, retail sales and the producer price index are also on the calendar.

Euro zone flash third-quarter GDP data out on Tuesday is in focus given signs of economic weakness in Germany, the bloc's largest economy, and described by some this year as the "sick man of Europe."

5/ ITALY RISK

Italy is back on the worry list with many investors concerned about growing fiscal risks steering clear of big exposure to the euro zone's third-largest economy.

Moody's (NYSE:MCO), which rates Italy just one notch above junk with a negative outlook, reviews the sovereign on Nov. 17. Fitch's latest review is due after Friday's market close.

A Moody's downgrade is the bigger risk given its Italy outlook and such a move could see the closely-watched 10-year bond yield gap over Germany pop to 250 bps, with potential ramifications across the periphery.

Italian stocks meanwhile are trading at a 50% discount to world stocks, the widest gap since 1988.

There is a silver lining. Stronger balance sheets mean banks are less vulnerable to bond turmoil than in the past and with parts of the equity market so deeply discounted, some see a buying opportunity that cannot be ignored.

(Graphics by Sumanta Sen, Pasit Kongkunakornkul, Riddhima Talwani, Prinz Magtulis and Kripa Jayaram; Compiled by Dhara Ranasinghe; Editing by Tomasz Janowski)

BANGKOK (Reuters) - Thailand's government has scaled down only slightly its signature handout policy, its prime minister said on Friday, despite growing concerns over its viability and potentially negative impact on Southeast Asia's second-largest economy.

The government has decided to reduce the overall "digital wallet" amount to 500 billion baht ($13.98 billion), with the scheme available to 50 million citizens to spend in their local areas within six months, premier Srettha Thavisin told a press briefing.

The ruling Pheu Thai Party's controversial policy was initially set at 560 billion baht ($15.66 billion) to be given to the majority of Thais, at 10,000 baht each, to stimulate a sluggish economy.

The government had been expected to make a bigger reduction in the scale of the project, after warnings from economists and some former central bankers that it could be fiscally problematic and further stoke inflation.

The scheme's value is equivalent to about 3% of gross domestic product (GDP).

The decision came after a meeting to consider reducing its scope to apply to certain groups for people. The plan will be implemented next year, but no exact timeframe was given.

Srettha has been in power for two months and is pursuing policies to cut living costs, control household debt and jumpstart the economy through measures to boost tourism, a key driver of growth while exports struggle from weak global demand.

Last month, central bank Governor Sethaput Suthiwartnarueput said the bank's growth forecast of 4.4% in 2024 would be lowered if the handout plan was reduced.

The finance ministry predicts growth of 3.2% in 2024, excluding the effect of the scheme.

($1 = 35.76 baht)