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SNB, ECB, BOC cut rates this week, dollar jumps

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30-yr Treasury yields up 22 bps this week

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China stocks fall as CEWC fails to excite

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Dollar gains 1.7% on yen as traders pare BOJ hike bets

By Stella Qiu

SYDNEY, Dec 13 (Reuters) - Asia shares fell on Friday as

a strong dollar kept risk sentiment fragile, while longer-dated

Treasury yields are heading for their biggest weekly rise this

year as expectations for deep U.S. rate cuts in 2025 recede.

A top level meeting in Beijing pledged to increase debt

and boost consumption but failed to boost Chinese equity

markets. Policymakers are girding for more trade tensions with

the U.S. as Donald Trump's return to power approaches.

It has been a week of rate cuts from Switzerland, Canada and

the European Central Bank, which had rate differentials working

in the favour of the U.S. dollar.

The other main point of the week has been the rise in

long-term treasury yields. Markets are still confident of a cut

from the Federal Reserve next week but suspect it will sound

cautious about next year. Futures imply little chance of a move

in January, with just two more easings priced in to 3.8% by

end-2025.

Thirty-year yields have jumped 22 basis points

so far this week, their biggest since October 2023.

In contrast, rates in Europe are seen at 1.75% compared with

3% currently, while those for Canada are expected to fall from

3.25% to 2.7% by then.

MSCI's broadest index of Asia-Pacific shares outside

Japan slipped 0.5% in Friday morning trade.

Japan's Nikkei fell 1% but is still on track for a

weekly gain of 0.9%.

China's blue chips dropped 0.7% and Hong

Kong's Hang Seng lost 1.2% after the Central Economic

Work Conference did not offer details on new stimulus measures.

A subindex of Chinese property firms listed in Hong Kong

slid 2.6%.

Jian Chang, chief China economist at Barclays, said the CEWC

likely disappointed markets as a Dec. 9 Politburo statement had

raised hopes of more aggressive easing.

"We maintain our view that incremental and reactive

policy is more likely than pre-emptive and 'bazooka' policy," he

said.

On Wall Street, stocks closed lower overnight as some

investors booked profits from the Nasdaq's relentless run to

record highs. That said, Nasdaq futures rose 0.4% in

Asia.

Data on U.S. producer prices came out a little hotter

than expected in November at 0.4% but that was due to a 50% jump

in egg prices. The core reading was softer and led Goldman Sachs

to lower their forecast for the Fed's prefered gauge of

inflation - the core personal consumption expenditures price

index due next week - to a monthly rise of 0.13%.

In the foreign exchange market, the dollar is on

track for a weekly jump of 1% against its peers.

It gained 1.8% on the Japanese yen this week

as markets scaled back the chance of a rate hike from the Bank

of Japan next week to just 22%. Sources said the BOJ is leaning

towards keeping rates steady..

The dollar also rose 1.6% on the swiss franc to

0.8919, just within a whisker of a five-month high of 0.8957,

after the Swiss National Bank surprised economists by cutting by

50 basis points.

Treasuries were steady on Friday but headed for heavy

weekly losses across the curve. The two-year yield

rose 9 basis points to 4.1906%, while the ten-year benchmark

yield jumped 17 bps to 4.3219%.

Oil prices edged lower on Friday, but were set for decent

weekly gains after the European Union agreed to new round of

sanctions threatening Russian oil flows. U.S. West Texas

Intermediate (WTI) eased 0.1% to $69.95 a barrel and is

up 4% this week.

Gold gained 2% this week to $2,690.21 per ounce, still some

distance from its record of $2,790.