백찬규 연구원은 "미국 금융업종 내 보험산업에 대한 투자심리는 당분간 약화될 수밖에 없다"고 설명했다.

By Ankur Banerjee

SINGAPORE (Reuters) - The dollar hung near its highest in more than two years on Tuesday as traders scale back U.S. rate cuts in 2025 after strong economic data, while investor worries about Britain's fiscal health kept frail sterling in the spotlight.

With President-elect Donald Trump set to step back into the White House next week, the focus has been on his policies that analysts expect will boost growth but add to price pressures.

The threat of tariffs along with the Federal Reserve's stated measured approach to rate cuts this year have lifted Treasury yields and the dollar, putting the euro, pound, yen and yuan under pressure.

Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities, said the market's focus now appears to be shifting towards the possibility that U.S. tariffs may be raised gradually.

"The decline in the USD overnight to these headlines suggests that tariffs fears have been baked in," said Newnaha, referring to a Bloomberg report that suggested the Trump administration could take a gradual approach to tariffs.

"And should these headlines persist into Trump's inauguration, it's likely to be see UST yields and the USD head lower with U.S. equities turning higher."

The euro was steady at $1.02475 in early trading but hovering near the more than two-year low of $1.0177 it touched on Monday. The yen was at 157.54 per dollar, inching away from the near six-month low it touched last week.

The dollar index, which measures the U.S. currency versus six other units, was 0.16% higher at 109.59, not far from the 26-month high of 110.17 it touched on Monday.

After a blowout jobs report on Friday reinforced support for the U.S. central bank's cautious stance toward further monetary policy easing this year, investor focus will be on the inflation report due on Wednesday.

Traders are pricing in 29 basis points of easing this year, less than the 50 basis points the Fed projected in December, when it jolted the market with its measured approach to rate cuts due to inflation worries.

U.S. Treasury 10-year yields touched a 14-month high of 4.799%, on Monday in choppy trading before pulling back. It was at 4.7717% in early Asian hours. [US/]

ING strategists said the combination of a stronger dollar and higher Treasury yields is crowding out financial flows to the rest of the world and is starting to cause problems.

"Using the tariff era of 2018-2019 as a template, we expect the dollar to stay strong all year," they said in a note, adding that most important FX market battleground right now is the dollar/yuan – where the PBOC is still managing to hold the line even as depreciation pressure intensifies.

The People's Bank of China (PBOC) has unveiled a flurry of measures to support its weak currency, plans to park more dollars in Hong Kong to bolster the yuan and to improve capital flows by allowing companies to borrow more overseas.

The offshore yuan was last at 7.3465 per dollar in early trading.

The pound has been in the crosshairs of global currency traders with British markets hit by surging bond yields. While higher yields often support the currency, in Britain analysts expect higher borrowing costs may force the government to rein in spending or raise taxes to meet its fiscal rules, potentially weighing on future growth.

The pound last fetched $1.2211 in early trading after hitting $1.21 on Monday, its lowest since November 2023.

The Australian dollar was 0.13% higher on the day at $0.6184, after hitting its weakest since April 2020 on Monday. The New Zealand dollar rose 0.3% to $0.55995, hovering near the two-year low it hit in the previous session.

By Chuck Mikolajczak

NEW YORK (Reuters) -The Nasdaq fell on Monday, while the benchmark S&P 500 bounced off a two-month low and eked out a slight gain as U.S. Treasury yields stayed elevated with investors dialing back expectations on the pace of rate cuts from the Federal Reserve.

Recent economic data have indicated a resilient economy with nagging price pressures, which has pressured equities. Comments from Fed officials have pushed bond yields higher. The S&P 500 had weekly losses in four of the last five weeks.

Promised tariffs from President-elect Donald Trump have also fueled worries about inflation.

Treasury yields edged higher, with the benchmark 10-year note yield touching a 14-month high of 4.805% and last up 1.6 basis points to 4.79%.

Markets are pricing in about 27 basis points of cuts from the Fed this year, with a 52.9% chance for a June cut.

"There's concern that we're going to see higher inflation numbers, I'm not so sure that's positively the case, but that's sort of the concern here and that it's going to be a while before we see lower rates again," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"The inflation issue is out there and higher yields in general aren't great for either the bond market or really the stock market. You do have out there as well, Jan. 21st coming up and you know and we'll see what the new administration does."

The Dow Jones Industrial Average rose 358.67 points, or 0.86%, to 42,297.12, the S&P 500 gained 9.18 points, or 0.16%, to 5,836.22 and the Nasdaq Composite lost 73.53 points, or 0.38%, to 19,088.10.

The Dow was buoyed by a 3.93% gain in UnitedHealth Group (NYSE:UNH) after President Joe Biden's administration proposed 2026 reimbursement rates for Medicare Advantage plans run by private insurers, which would result in a 2.2% increase in payments.

CVS Health (NYSE:CVS) and Humana (NYSE:HUM) jumped about 7% as the S&P 500 health care sector rose 1.27%.

Utilities and tech led decliners. Edison International (NYSE:EIX) tumbled more than 11.89% after Bloomberg News reported the southern California utility was hit with a lawsuit blaming the company's equipment for igniting one of the wildfires consuming parts of the state.

Energy climbed 2.25%, the biggest daily gain of the 11 major S&P sectors, as crude prices kept rising on expectations that tougher U.S. sanctions on Russian oil would force buyers in India and China to other suppliers.

The Consumer Price Index (CPI) numbers and the central bank's Beige Book on economic activity, both due on Wednesday, will likely help shape views on the Fed's policy outlook.

Chip stocks slipped, with Nvidia (NASDAQ:NVDA) down 1.97% and Micron Tech (NASDAQ:MU) off 4.31% after the U.S. government said it would further restrict artificial-intelligence chip and technology exports. The PHLX semiconductor index was lower.

Moderna (NASDAQ:MRNA) plummeted 16.8% as the biggest decliner on the S&P 500 after slashing its 2025 sales forecast by $1 billion.

Declining issues outnumbered advancers by a 1.02-to-1 ratio on the NYSE, and by a 1.4-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and 23 new lows, while the Nasdaq Composite recorded 23 new highs and 252 new lows.

Volume on U.S. exchanges was 14.88 billion shares, compared with the 15.73 billion average for the full session over the last 20 trading days.

BEIJING (Reuters) - The value of China's imports and exports with Russia reached 1.74 trillion yuan ($237 billion) in 2024, a record high, Chinese customs data showed on Monday, as the two countries' leaders hailed bilateral relations.

China-Russia yuan-denominated trade value grew 2.9% in 2024 from 2023, according to the data by China's General Administration of Customs. The growth was significantly slower than the 32.7% gain in 2023.

Bilateral trade was disrupted by payment hurdles last year after the United States intensified sanctions on banks dealing with Russia, Reuters previously reported.

Russian President Vladimir Putin said in December that the primary challenge to Russia-China trade is mutual payment settlements.

Chinese shipments to Russia in 2024 grew 5.0% in yuan terms from a year earlier, down sharply from the 53.9% gain in 2023, the customs data showed.

Imports from Russia rose 1% last year, slowing from a 18.6% expansion in 2023.

In dollar terms, China-Russia two-way trade value reached $244.8 billion, compared with $240.1 billion in 2023, Chinese customs data showed.

In an exchange of New Year greetings with Putin, Chinese President Xi Jinping said on Dec. 31 that China and Russia have always moved forward "hand in hand" on the right path.

Russia's state-run RIA news agency quoted Moscow's ambassador to Beijing as saying in December that Xi will visit Russia in 2025.

Putin also said last year that bilateral relations had reached a level never seen before, lauding their positive nature.

In December alone, China's exports to Russia grew 6.4% in yuan terms, reversing November's drop, but imports from Russia shrank 4.3% last month.

($1 = 7.3317 Chinese yuan renminbi)

SHANGHAI (Reuters) - Lithium prices are expected to stabilise in 2025 after two years of steep declines as shuttered mines and robust electric vehicle sales in China soak up an oversupply, although the potential for mines to reopen may cap gains, analysts and traders said.

A nearly 86% plunge in prices of the EV battery metal over the past two years from its peak in November 2022 forced companies to mothball mines across the world. But market participants say those closures mean buoyant demand should outpace supply this year as China intensifies policy support to boost sales in the world's largest EV market.

The global lithium supply glut is predicted to shrink by half to around 80,000 tons equivalent of lithium carbonate (LCE) from nearly 150,000 last year, according to Antaike, China's state-owned commodity data provider.

"We expect to see a price recovery for lithium in 2025 as the curtailments seen in 2024, and the possibility of further curtailments, will significantly reduce the market surplus," said Cameron Hughes, battery markets analyst at CRU Group, referring to mine closures without giving further details.

China doubled EV subsidies in July and more than 5 million cars sold as of mid-December had benefited from the incentives.

China's EV subsidies contributed to a lithium price rally late last year, and should continue supporting prices in 2025, three analysts and two traders said.

"The uptick in lithium trade business in the fourth quarter of 2024 can be undeniably attributed to the policy of providing subsidies," a buyer at a mid-sized cathode material plant in China said on condition of anonymity as the buyer was not authorized to speak to media.

Any improvement in prices is likely to be felt towards the end of 2025 as inventories are used up and buyers return to the spot market, said David Merriman, research director at metals research company Project Blue.

Project Blue expects prices to stabilize around an average of $11,092 per metric ton in 2025. Guotai Juan, a Chinese broker, forecasts a price range of 60,000 yuan ($8,184) to 90,000 yuan ($12,276).

The most-traded lithium contract on the Guangzhou Futures Exchange traded between 68,250 yuan and 125,000 yuan per ton last year.

Analysts, however, cautioned that any significant price rise this year is likely to be capped as production can be swiftly scaled up at many closed mines if it proves profitable.

Merriman said that potential U.S. policy changes under the incoming Trump administration, including fresh tariffs on EV battery imports from China or slashing domestic EV incentives, may also pose risks to lithium demand.

($1 = 7.3312 Chinese yuan)

Investing.com-- Most Asian currencies weakened on Monday, seeing sustained pressure from strength in the dollar as stronger-than-expected U.S. payrolls data fueled increased expectations that interest rates will fall at a slower pace in 2025. 

Regional trading volumes were somewhat muted on account of a Japanese market holiday, although the yen also remained largely fragile along with its regional peers.

Positive Chinese trade data did little to improve regional sentiment, with the yuan remaining fragile despite efforts from the People’s Bank to support the currency. 

Dollar at 24-mth high on strong payrolls data 

The dollar index and dollar index futures drifted higher in Asian trade after hitting their strongest levels since November 2022 on Friday.

The greenback was boosted chiefly by stronger-than-expected nonfarm payrolls data for December, which showed the U.S. labor market remained strong.

The reading tied into heightened concerns that a strong labor market and sticky inflation will give the Federal Reserve even more impetus to cut interest rates slowly this year.

To that end, consumer price index inflation data is due this Wednesday and will be closely watched for more cues on interest rates. 

A string of Fed officials are also set to speak this week, after the minutes of the Fed’s December meeting showed growing concerns over high inflation and labor market strength among policymakers.

Goldman Sachs analysts said that they now expected only two interest rate cuts in 2025, compared to prior expectations of three cuts. The Fed’s terminal rate is also expected to be higher than initially expected. 

Chinese yuan weak despite positive trade data, PBOC support 

The Chinese yuan weakened on Monday, with the USDCNY pair rising 0.3%.

Weakness in the yuan came even as data showed China’s trade balance grew more than expected in December, aided by outsized exports.

But the reading was largely tied to exporters front-loading their shipments ahead of U.S. President-elect Donald Trump imposing steep trade tariffs on the country. 

Trump- who will take office on January 20- has vowed to impose tariffs on China from “day one” of his presidency. 

Recent measures from the PBOC did little to support the yuan. The central bank paused its bond buying liquidity programs, and also set a series of strong midpoint fixes. 

Focus is now on more stimulus measures from Beijing, especially in response to Trump’s tariffs. 

Broader Asian currencies moved in a flat-to-low range, remaining pressured by the prospect of higher for longer U.S. interest rates. 

The Japanese yen’s USDJPY pair fell 0.1%, remaining quashed by uncertainty over a Bank of Japan meeting later this month.

The Australian dollar’s AUDUSD pair rose 0.1% after slumping to a near five-year low last week. The South Korean won’s USDKRW pair fell slightly, while the Singapore dollar’s USDSGD pair rose 0.1%.

The Indian rupee’s USDINR pair steadied after hitting fresh record highs above 86 rupees. 

Investing.com-- Goldman Sachs analysts said they now expect the Federal Reserve to cut interest rates twice this year, down from their prior forecast of three cuts, amid increased concerns over sticky inflation and labor market strength.

GS expects two rate cuts in 2025- in June and December, and one additional cut in 2026, bringing the Fed’s terminal rate to 3.5% to 3.75%, from current levels of 4.25% to 4.5%. 

The investment bank’s shift in expectations came just after stronger-than-expected nonfarm payrolls data for December, which spurred increased bets that the Fed will have little immediate impetus to keep cutting interest rates. The reading also triggered steep losses on Wall Street.

The Fed cut rates by 1% through 2024, but warned of a much slower pace of cuts this year. The central bank had effectively slashed its outlook on rate cuts to a projected two from four for 2025, citing concerns over sticky inflation and a strong labor market. 

GS analysts said that while their baseline forecast for rates remained somewhat more dovish than market pricing, it was hard to have “great conviction in the timing of cuts” due to expectations of robust U.S. economic data, which made cuts reasonable but not critical. 

The investment bank also said that it was uncertain over how the Fed will navigate increases in trade tariffs under incoming President Donald Trump, who will take office next week. 

Trump has vowed to impose steep import tariffs on several major U.S. trading partners, especially China. But American importers are expected to pay the tariffs, heralding an increase in domestic goods and services that are reliant on imports. 

Investing.com -- Inflation data this week will likely test investors mettle against the background of Friday’s robust jobs report and uncertainty over Donald Trump’s policy plans. Earnings season gets underway, and oil prices are at multi-month highs as energy traders prepare for supply disruptions. Here's your look at what's happening in markets for the week ahead.

1. Inflation data

With a revival of inflation one of the key risks facing equity markets Wednesday’s CPI data will be closely watched.

Markets have already pushed out expectations for the next Federal Reserve rate cut to June after Friday’s unexpectedly strong jobs report showed payrolls increased by 256,000 last month, far more than forecasts of 160,000 and the unemployment rate fell to 4.1%.

Economists are expecting the December CPI to show a 2.9% year-over-year increase.

While the Fed was confident that inflation had moderated enough to start cutting interest rates in September, the pace of annual inflation has remained above the Fed's 2% target. The Fed now projects inflation will rise 2.5% in 2025.

Minutes from the Fed's latest meeting, released on Wednesday, showed policymakers are concerned Trump's policies on trade and immigration could prolong the effort to return inflation to target.

2. Big banks kick off earnings

JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) will kick off fourth-quarter earnings on Wednesday, while Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) report results on Thursday.

Robust investment banking fees, strong trading income and easing pressure to boost deposit rates are all expected to make for an upbeat earnings season for U.S. banks.

Expectations for bank results were also boosted following Trump’s election victory. The president-elect is expected to usher in a wave of deregulation and business-friendly tax reforms, which could significantly enhance banks' profitability.

S&P 500 company earnings are expected to have climbed nearly 10% in the quarter from a year earlier, according to LSEG IBES data cited by Reuters.

3. UK inflation

Wednesday’s UK inflation data will be in focus after last weeks selloff in UK government bonds, known as gilts, heaped pressure on the new Labour government as it seeks to stimulate the moribund economy.

British government bond yields have been climbing steadily since September, reflecting reduced expectations of Bank of England rate cuts, extra borrowing in the new government's Oct. 30 budget and higher US Treasury yields with Trump expected to pursue a loose fiscal policy and raise tariffs.

The December CPI is expected to show an annual increase of 2.6%, remaining above the Bank of England’s 2% target.

Comments by BoE officials will also be in the spotlight with Deputy Governor Sarah Breeden expected to speak on Tuesday and MPC member Alan Taylor due to deliver remarks the following day.

4. China data

China is to release a slew of data towards the end of the week which will give investors a chance to see how the word’s second biggest economy is performing as it faces the blow of impending US tariff hikes.

GDP data due on Friday is expected to confirm that the economy met its 5% annual growth target for 2024, as previously announced by President Xi Jinping at the end of December.

Beijing is also to release data on house prices, industrial production and retail sales.

China’s Vice Finance Minister Liao Min said Friday that Beijing has ample fiscal policy space and tools to support economic growth this year and it will step up spending to spur investment.

5. Oil sanctions

Oil prices rallied more than 3% to their highest in three months on Friday as traders braced for supply disruptions from the broadest U.S. sanctions package targeting Russian oil and gas revenue.

President Joe Biden's administration imposed fresh sanctions targeting Russian oil producers, tankers, intermediaries, traders and ports, aiming to hit every stage of Moscow's oil production and distribution chains.

Brent crude futures settled at $79.76 a barrel after crossing $80 a barrel for the first time since Oct.7. US West Texas Intermediate crude settled at $76.57 per barrel.

The timing of the sanctions, ahead of Trump's inauguration on Jan. 20, makes it likely that he will keep the sanctions in place and use them as a negotiating tool for a Ukraine peace treaty, analysts said.

By Stella Qiu and Chibuike Oguh

SYDNEY/NEW YORK (Reuters) -Global share markets were under pressure on Friday as investors counted down to a U.S. jobs report later in the day that could exacerbate or ease the sell-off in the global bond market, while the dollar stood near two-year highs.

Both Nasdaq futures and S&P 500 futures were down 0.3%. Wall Street was closed overnight to mark the funeral of former U.S. President Jimmy Carter.

Pan-European STOXX 50 futures and UK FTSE futures were flat.

The closely watched U.S. nonfarm payrolls report is due at 0830 U.S. Eastern time (1330 GMT). Median forecasts are for a rise of 160,000 in jobs in December with unemployment holding at 4.2%.

Anything stronger could see 10-year Treasury yields spike to 13-month peaks and lift the U.S. dollar in the process.

Analysts at ING believe a print below 150,000 jobs would be needed to stop Treasury yields from rising further.

"Payrolls, as always, are a pivotal report. But we need to deviate materially from consensus to have an effect this time around," said Padhraic Garvey, regional head of research, Americas, at ING.

"Given the move already in Treasuries, there is some talk that Friday's numbers will need to be strong to continue this momentum, and in that sense there is some vulnerability for a lower yield reaction to a consensus outcome."

In Asia, Japan's Nikkei fell 0.9%, taking its weekly loss to 1.6%. MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.5% and headed for a weekly decline of 1.2%.

China's blue-chips slipped 0.4% and Hong Kong's Hang Seng dropped 0.5%.

Chinese government bond yields climbed after the central bank said it has decided to suspend treasury bond purchases temporarily due to short supply of the bonds.

Overnight, Philadelphia Fed President Patrick Harker said he expects the U.S. central bank to cut interest rates, but added that an imminent move down isn't needed. Kansas City Fed President Jeff Schmid signaled a reluctance to cut interest rates.

Markets have already scaled back expectations to around 43 basis points of U.S. rate cuts for 2025, while concerns about President-elect Donald Trump's potentially inflationary agenda have helped drive up longer-term yields.

The benchmark 10-year U.S. Treasury yield climbed 1.5 basis points to at 4.6957%, just below an eight-month peak of 4.73% hit on Wednesday. The big chart level is 4.739% and if that breaks, bears would be targeting the psychologically important level of 5%, which has not been seen since 2007.

The climb in Treasury yields - up about 9 bps this week - has bolstered the dollar index to 109.30, gaining for a sixth straight week.

Worries about Britain's economy have kept the pound under pressure and hit gilts especially hard, driving yields to 16-1/2-year highs, although they have retreated somewhat.

The pound slipped 0.2% on Friday to $1.2278, having touched its lowest since November 2023 overnight. It is down 1.1% this week. [FRX/]

Oil prices rose on Friday. U.S. West Texas Intermediate crude futures rose 0.5% to $74.32 and were set for a weekly gain of 0.5%.

Gold prices rose 1.3% in the week to $2,674.44 an ounce, near its highest level since December.

UNITED NATIONS/NEW DELHI (Reuters) - Global economic growth is projected to remain at 2.8% in 2025, unchanged from 2024, held back by the top two economies, the U.S. and China, according to a United Nations report released on Thursday.

The World Economic Situation and Prospects report said that "positive but somewhat slower growth forecasts for China and the United States" will be complemented by modest recoveries in the European Union, Japan, and Britain and robust performance in some large developing economies, notably India and Indonesia.

"Despite continued expansion, the global economy is projected to grow at a slower pace than the 2010–2019 (pre-pandemic) average of 3.2%," according to the report by the U.N. Department of Economic and Social Affairs.

"This subdued performance reflects ongoing structural challenges such as weak investment, slow productivity growth, high debt levels, and demographic pressures," it said.

The report said U.S. growth was expected to moderate from 2.8% last year to 1.9% in 2025 as the labour market softens and consumer spending slows.

It said growth in China was estimated at 4.9% for 2024 and projected to be 4.8% this year with public sector investments and a strong export performance partly offset by subdued consumption growth and lingering property sector weakness.

Europe was expected to recover modestly with growth increasing from 0.9% in 2024 to 1.3% in 2025, "supported by easing inflation and resilient labour markets," the report said.

South Asia is expected to remain the world’s fastest-growing region, with regional GDP projected to expand by 5.7% in 2025 and 6% in 2026, supported by a strong performance by India and economic recoveries in Bhutan, Nepal, Pakistan and Sri Lanka, the report said.

(Reuters) - Oil prices rose in early Asian trade and were on track for a third straight week of gains with icy conditions in parts of the United States and Europe driving up fuel demand for heating.

Brent crude futures climbed 24 cents, or 0.3%, to $77.16 a barrel at 0138 GMT. U.S. West Texas Intermediate crude futures gained 26 cents, or 0.4%, to $74.18.

Over the three weeks ending Jan. 10, Brent has advanced 5.9% while WTI has jumped 6.9%.

Analysts at JPMorgan attributed the gains to growing concern over supply disruptions due to tightening sanctions, amid low oil stockpiles, freezing temperatures in many parts of the U.S. and Europe and improving sentiment regarding China's stimulus measures.

The U.S. weather bureau expects central and eastern parts of the country to experience below-average temperatures. Many regions in Europe have also been hit by extreme cold and will likely continue to experience a colder-than-usual start to the year, which JPMorgan analysts expect to boost demand.

"We anticipate a significant year-over-year increase in global oil demand of 1.6 million barrels a day in the first quarter of 2025, primarily boosted by ... demand for heating oil, kerosene, and LPG," JPMorgan said in a note on Friday.

Meanwhile, the premium of the front-month Brent contract over the six-month contract reached its widest since August this week, potentially indicating supply tightness at a time of rising demand.

Oil prices have rallied despite the U.S. dollar strengthening for six straight weeks. A stronger dollar typically weighs on prices, as it makes purchases of crude expensive outside the United States.

Supplies could be further hit as U.S. President Joe Biden is expected to announce new sanctions targeting Russia's economy this week in a bid to bolster Ukraine's war effort against Moscow before President-elect Donald Trump takes office on Jan. 20. A key target of sanctions so far has been Russia's oil industry.