Shares edge lower; dollar, bond yields hold near highs

The US dollar and bond yields have held near multi-month peaks on expectations the Federal Reserve would slow its pace of easing, while global shares were mostly lower, with investors waiting for Nvidia's earnings release.

US President-elect Donald Trump's new administration is beginning to take shape with nominations to health and defence roles last week, but 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 US health job has already led to a fallout in the health care sector, with drug makers sliding at the end of last week.

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

US 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 per cent, while the two-year yield last stood at 4.2823 per cent.

Futures expect a quarter-point easing in December and only 75 basis points of cuts by the end of 2025, compared with more than 100 a few weeks ago, after Fed chair Jerome Powell's comments last week signalling that borrowing costs could remain higher for longer.

The shift in outlook for US 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 $US1.2618, languishing near last week's six-month low, while the euro stood at $US1.0547.

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 on Monday was down 0.1 per cent, while the pan-European STOXX 600 was off 0.2 per cent.

Nasdaq futures were gaining 0.5 per cent, after the index slid for five straight days last week.

S&P 500 futures edged 0.1 per cent higher before Nvidia's third-quarter results on Wednesday, where analysts expect the artificial intelligence chip leader to record a jump in revenue.

Shares of Nvidia are up nearly 200 per cent in 2024, with its hefty weighting in the S&P 500 partially responsible for the index's charge to record highs.

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.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 per cent.

Japan's Nikkei 225 fell 1.1 per cent, dragged down by a decline in technology shares.

The Japanese currency has fallen some seven per cent 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.

Oil prices were mixed. Brent crude futures were flat $US71.03 a barrel, while US crude futures dipped 0.2 per cent to $US66.88.

Spot gold jumped 1.1 per cent to $US2,590 an ounce, recovering from its sharp fall last week.