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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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S&P 500 futures edge down before US CPI, earnings

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Dollar holds firm, sterling hits fresh lows

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Treasury yields near 14-mth top, Fed easing scaled back

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Oil jumps to 4-mth high as Russia supply crimped

(Adds China trade data, stocks)

By Wayne Cole

SYDNEY, Jan 13 (Reuters) - Major share indexes slipped

in Asia on Monday while the dollar held near 14-month peaks

after an unambiguously strong payrolls report shoved up bond

yields and tested lofty equity valuations, just as the earnings

season gets under way.

That hawkish jolt also raised the stakes for U.S. consumer

price figures on Wednesday where any rise in the core greater

than the forecast 0.2% would threaten to close the door on

easing altogether.

Not helping was a spike in oil prices to four-month highs

amid signs of weaker crude shipments from Russia as Washington

stepped up sanctions on the country.

Data also showed China's export growth picked up steam in

December, while imports recovered, as the world's No. 2 economy

braces for mounting trade risks with the incoming U.S.

administration.

Markets have already scaled back expectations for Federal

Reserve rate cuts to just 27 basis points for all of 2025, with

the terminal level now seen around 4.0% compared to the 3.0%

many had hoped for this time last year.

"Given such strong data, we now expect the Fed to cut rates

only once this year, by 25bp in June," said Christian Keller,

head of economic research at Barclays.

"We still expect the FOMC to proceed with a cut in June, as

we expect the economy to slow in coming quarters and inflation

to continue to decline in H1, before tariffs lead to some

firming in inflation in H2."

At least five Fed officials are on the docket to speak this

week and offer their reaction to the jobs surprise, with the

influential Federal Reserve Bank of New York President John

Williams appearing on Wednesday.

The sea change on rates lifted yields on 10-year Treasuries

to 14-month peaks of 4.79%, and they were last

trading at 4.764% in Asia.

Higher yields on risk-free bonds raise the discounting bar

for corporate earnings and make debt relatively more attractive

compared to equities, cash, property and commodities.

They also raise borrowing costs for businesses and

consumers, and that is before President-elect Donald Trump's

proposed tariffs inflate import prices.

This could test the optimism around corporate earnings as

the season kicks off with the major banks on Wednesday,

including Citigroup, Goldman Sachs and JPMorgan.

BEARS SLATHER OVER STERLING

S&P 500 futures fell 0.4%, and Nasdaq futures

0.5%, adding to Friday's pullback. EUROSTOXX 50 futures

and FTSE futures eased 0.2%, while DAX futures

were almost flat.

A holiday in Japan made for thin early trading on Monday and

MSCI's broadest index of Asia-Pacific shares outside Japan

edged down 0.4%.

While the Nikkei was shut, futures traded

down sharply at 38,430 compared to a cash close of 39,190.

South Korean stocks eased 0.%, with the political

situation still in flux as a Constitutional Court hearing begins

on Tuesday to decide if impeached president, Yoon Suk Yeol, will

be removed from office or reinstated.

Chinese blue chips were off 0.2%, as data showed

exports rose a surprisingly steep 10.7% and imports added 1%.

The performance was almost too strong given it swelled the

surplus with the U.S. to $105 billion and provided ammunition to

those calling for harsh tariffs on Chinese goods.

China's central bank also stepped up efforts to defend a

weakening yuan by relaxing rules to allow more offshore

borrowing and sending verbal warnings on the currency.

Figures for Chinese gross domestic product, retail sales and

industrial output are out on Friday.

The inexorable rise in Treasury yields has boosted the

dollar across the board and seen the euro fall for eight weeks

straight to sit at $1.0230, just above its lowest

since November 2022.

The dollar eased to 157.60 yen, and off a

six-month top of 158.88 amid reports the Bank of Japan might

revise up its inflation forecasts this month as a prelude to

hiking rates again.

Sterling was pinned at 14-month lows of $1.2170,

with sentiment soured by a recent rout in the gilt market on

concerns the Labour government would have to borrow more to fund

spending pledges.

British finance minister Rachel Reeves on Saturday vowed she

would act to ensure the government's fiscal rules were met.

Gold prices were holding firm at $2,688 an ounce,

having proven surprisingly resilient in the face of a stronger

dollar and higher bond yields.

Oil prices continued to climb on supply concerns as Russia's

seaborne exports hit their lowest since August 2023, even before

the latest round of U.S. sanctions.

Brent jumped $1.19 to $80.94 a barrel, while U.S.

crude surged $1.27 to $77.84 per barrel.