*

Traders no longer fully price US rate cuts in 2025

*

S&P 500 futures edge down before U.S. CPI, earnings

*

Sterling under pressure as gilt yields rise again

*

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

*

Oil jumps to 4-mth high as Russia supply crimped

(Updates throughout with European morning trading)

By Amanda Cooper

LONDON, Jan 13 (Reuters) - Global stocks fell on Monday,

while the dollar hit 26-month peaks following a bumper U.S. jobs

report that prompted investors to question if interest rates

will fall at all this year, just as earnings season is about to

get underway.

A surge in energy prices has added to concern about steadily

rising inflation, as crude oil topped $80 a barrel on the back

of signs that Russian exports are falling as Washington has

stepped up sanctions on the country.

European natural gas prices have risen by 4% in the last

month alone following a cold snap and after Ukraine's decision

to halt supplies of Russian gas deliveries via pipeline.

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.

In Europe, equities fell for a second day, leaving the STOXX

600 down 0.7% and Germany's DAX down 0.6%. The

FTSE 100 was only down 0.4%, supported by weakness in

the pound, which was once again in focus as UK

borrowing costs continued to rise.

Markets show traders have already scaled back expectations

for Federal Reserve rate cuts to just 25 basis points for all of

2025, from closer to 45 bps before Friday's jobs data.

"After a very strong jobs report, we think the cutting cycle

is over," declared Aditya Bhave, deputy chief U.S. economist at

BofA. "Inflation is stuck above target, with upside risks."

"The conversation should move to hikes, which could be in

play if y/y core PCE exceeds 3% and inflation expectations

de-anchor," he added, referring to the Fed's favoured personal

consumption expenditure measure of prices.

Yields on 10-year Treasuries traded at to

14-month peaks of 4.79%.

Wednesday's consumer price index (CPI) report could prove

even more market-moving than usual, given how close investors

are to ruling out any rate cuts at all this year.

"As the weather warms up a bit, whether the deep freeze in

bond markets continues may be determined by how US CPI on

Wednesday materialises after Friday's blockbuster payrolls

report," Deutsche Bank strategist Jim Reid said.

Higher bond yields raise the discounting bar for corporate

earnings and make debt relatively more attractive compared to

equities, cash, property and commodities.

But they also raise borrowing costs for businesses and

consumers. Part of the increase in yields over the past few

weeks has been driven by an expectation that President-elect

Donald Trump's proposed tariffs will raise import prices.

This could test the optimism around corporate earnings as

the season kicks off on Wednesday with the major banks including

Citigroup, Goldman Sachs and JPMorgan.

MORE LOSSES AHEAD

S&P 500 futures fell 0.6%, and Nasdaq futures

dropped 0.95%, suggesting more losses ahead on Wall Street on

top of Friday's slide .

In Asia, a holiday in Japan made for thin trading on Monday.

Chinese blue chips fell 0.3%, as data showed

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

adding ammunition to those calling for harsh tariffs on Chinese

goods.

The 45-bp rise in Treasury yields in the last two months has

pushed the dollar to its highest since November 2022 against a

basket of currencies.

Sterling has been particularly hard hit, down 4.4% in that

time. On Monday, the pound was down 0.4% at $1.215, its weakest

since early November 2023.

The global selloff in bonds has battered the UK gilt market,

sending long-term yields to their highest since 1998

, as concerns have mounted over the government having

to borrow more to meet its budget commitments.

British finance minister Rachel Reeves on Saturday said she

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

The euro was down 0.3% at $1.0216, having touched

its lowest since November 2022 earlier in the day, at $1.0207.

The dollar fell 0.1% against the yen to 157.535,

but remained near six-month highs.

Oil prices rose another 2%, after a drop in Russia's

seaborne exports to their lowest since August 2023 fuelled

concern about supply, even before the latest round of U.S.

sanctions. Brent crude futures were up 2.3% at 81.56 a

barrel.

(Additional reporting by Wayne Cole in Sydney and Rae Wee in

Singapore; Editing by Kate Mayberry, Jacqueline Wong and Angus

MacSwan)