text: LONDON/SYDNEY, Jan 15 – European stocks fell on Monday as bond yields climbed, and Chinese equities dipped after the country’s central bank unnerved investors by skipping an expected rate cut.
  US markets were closed for Martin Luther King, Jr. Day.
  Europe’s STOXX 600 index was last down 0.5%, taking its fall for the year to around 1%, after a 13% increase in 2023.
  Britain’s FTSE 100 was 0.4% lower and Germany’s DAX was off by 0.5%.
  The Chinese CSI 300 index fell to its lowest since 2019 but finished 0.1% lower as investors digested the central bank’s decision to leave its medium-term policy rate unchanged on Monday, defying expectations for a cut.
  Investors are set for a busy week with data on Chinese fourth-quarter growth, British inflation, and US retail sales all due on Wednesday.
  They will also be listening closely to central bank officials, especially the Federal Reserve’s Christopher Waller, whose dovish turn in late November helped to send markets soaring and who speaks on Tuesday.
  Duncan Toms, multi-asset strategist at HSBC, said markets were vulnerable to a reconsideration of expectations for heavy rate cuts this year.
  “With so much in the price… there is little support to be expected for valuations,” he said. “We expect a rather broad-based correction across all asset classes.”
  Traders expect around 165 basis points of rate cuts from the Fed this year, and see an 80% chance of them starting in March, according to money market pricing.
  “The first half of January has shown a dislocation between rate expectations and data in the US,” said Francesco Pesole, currency strategist at ING.
  “The two most important data points for the Federal Reserve, labor and CPI inflation figures, both came in hotter than expected.”
  ECB OFFICIALS PUSH BACK ON RATE CUTS
  US Treasury trading was shut on Monday, but Germany’s 10-year bond yield was up 5 basis points at 2.195%, around its highest level since mid-December.
  Prices, which move inversely to yields, fell as European Central Bank officials pushed back against market expectations for rapid interest rate cuts this year.
  Japanese stocks continued to shine, with the Nikkei 225 index hitting a 34-year high above 36,000. The market has been buoyed by falls in the yen and US bond yields in recent days.
  The focus of world leaders and executives gathering for the 54th World Economic Forum meeting this week in Davos, Switzerland, will be global politics.
  However, markets showed a limited reaction to the victory of the ruling Democratic Progressive Party in Taiwan over the weekend, a result which displeased Beijing.
  The US Republican Iowa caucus will be run in frigid weather later on Monday. At the same time, concern is running high about a broadening of the Middle East conflict.
  The euro was treading water at USD 1.095, while the dollar index rose 0.14% to around 102.65.
  Oil prices have drawn support from disruptions to shipping in the Red Sea, though doubts about demand this year have limited the rally.
  Brent crude oil was last down 0.8% at USD 77.66 a barrel, down from a two-week high of USD 80.75 on Friday.
  (Reporting by Harry Robertson in London and Wayne Cole in Sydney; Editing by Sonali Paul, Christopher Cushing, Angus MacSwan, Barbara Lewis, and Alex Richardson)