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Dollar, U.S. bond yields hold near multi-month highs

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Global shares soft with focus on Nvidia ( NVDA ) results

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BOJ's Ueda stays vague on timing of next rate hike

(Updates at 0903 GMT)

By Samuel Indyk and Rae Wee

LONDON, Nov 18 (Reuters) - The U.S. dollar and bond

yields held near multi-month peaks on Monday on expectations the

Federal Reserve would slow its pace of easing, while global

shares were mostly lower, with investors waiting for Nvidia's ( NVDA )

earnings release later in the week.

U.S. President-elect Donald Trump's new administration is

beginning to take shape with nominations to health and defense

roles last week, but two key positions for financial markets,

Treasury Secretary and Trade Representative, are yet to be

filled.

Trump's pick of vaccine sceptic Robert F. Kennedy Jr. for

the top U.S. health job has already led to a fallout in the

health care sector, with drugmakers sliding at the end of last

week.

"It should be a quieter week as the recent relentless wave

of U.S. macro and political news flow in theory slows down with

the main story on this front being on potential political

appointments for the new Trump administration," said Deutsche

Bank head of global economics and thematic research Jim Reid.

Trump's plans for lower taxes and higher tariffs are

expected to spur inflation and reduce the Fed's scope to ease

interest rates.

U.S. Treasury yields held near multi-month highs on Monday,

having been bolstered by bets of less aggressive Fed rate cuts

down the line.

The benchmark 10-year yield steadied at 4.4256%,

while the two-year yield last stood at 4.2823%.

Futures imply a 60% chance of the Fed easing by a

quarter-point in December and have only 75 basis points of cuts

priced in by the end of 2025, compared with more than 100 a few

weeks ago.

That has come on the back of Fed Chair Jerome Powell's

comments last week signalling that borrowing costs could remain

higher for longer.

"With changes afoot in immigration policy, tariff policy,

and fiscal policy, Fed officials would tread more lightly anyway

in view of the inflationary impact that these policies pose,"

said Thierry Wizman, global FX and rates strategist at

Macquarie.

The shift in outlook for U.S. rates and inflation lifted the

dollar to a one-year high last week.

The dollar index, which measures the currency against a

basket of six others, was steady at 106.69, just below last

week's peak of 107.07.

Sterling last bought $1.2618, languishing near last

week's six-month low, while the euro stood at $1.0547.

GLOBAL STOCKS SOFT

Global equity markets were slightly lower as investors took

stock of latest developments with Trump's top team and the

outlook for monetary policy.

MSCI's broadest gauge of world stocks was

down 0.1%, while the pan-European STOXX 600 was off

0.2%. Major indexes in Frankfurt, London and

Paris were down 0.1% to up 0.2%.

Nasdaq futures were gaining 0.5%, after the index

slid for five straight days last week. S&P 500 futures

edged 0.1% higher ahead of Nvidia's ( NVDA ) third-quarter results on

Wednesday, where analysts expect the artificial intelligence

chip leader to record a jump in revenue.

Shares of Nvidia ( NVDA ) are up nearly 200% this year, with its

hefty weighting in the S&P 500 partially responsible for the

index's charge to record highs this year.

But its blistering multi-year run has also raised the bar

for earnings outperformance and a slip-up could fuel worries

that the market's AI hopes have outstripped reality.

In Asia, MSCI's broadest index of Asia-Pacific shares

outside Japan advanced 0.2%.

Japan's Nikkei 225 fell 1.1%, dragged down by a

decline in technology shares.

Bank of Japan Governor Kazuo Ueda reiterated on Monday the

central bank will keep raising rates if economic and price

developments move in line with its forecasts, but made no

mention of whether a hike could come in December.

However, he later said in a press conference that keeping

inflation-adjusted real interest rates low for too long could

cause excessive inflation and force the BOJ into hiking interest

rates rapidly.

Ueda's comments were closely watched by investors for clues

on the BOJ's next rate hike.

The Japanese currency has fallen some 7% since

October against a resurgent dollar and last week weakened past

the 156 per dollar level for the first time since July, keeping

traders on alert for any intervention from Japanese authorities.

It was last marginally lower at 154.61 per dollar.

In commodities, oil prices were mixed. Brent crude futures

were flat $71.03 a barrel, while U.S. crude futures

dipped 0.2% to $66.88.

Spot gold jumped 1.1% to $2,590 an ounce, recovering

from its sharp fall last week.