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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

(Updated at 1230 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," Deutsche Bank

head of global economics and thematic research Jim Reid said.

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 edged back towards multi-month highs on

Monday, having been bolstered by bets of less aggressive Fed

rate cuts down the line.

The benchmark 10-year yield rose 4.5 basis

points (bps) to 4.471%, while the two-year yield last

stood at 4.3141%.

Futures imply about 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 saying that there was no need to rush rate

cuts.

"A lot of the rate cuts for next year have been priced out

of the curve after Trump's election," Niels Christensen, chief

analyst in the market strategy team at Nordea, said.

"It's not a situation where the Fed should be in a hurry

to cut rates further," Christensen added, pointing to last

week's strong

retail sales

data.

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 106.76, just below last

week's peak of 107.07.

Sterling last bought $1.2621, languishing near last

week's six-month low, while the euro stood at $1.0540.

GLOBAL STOCKS SOFT

Global equity markets were slightly lower as investors took

stock of the 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 0.2% to up 0.1%.

Nasdaq futures were gaining 0.3%, rebounding 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.

Japan's 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 lower on Monday at 155.18 per dollar.

In commodities, oil prices rose. Brent crude futures

edged up 0.7% to $71.52 a barrel, while U.S. crude futures

rose 0.5% to $67.36.

Spot gold jumped 1.3% to $2,593 an ounce, recovering

from its sharp fall last week.