Asian and European markets sank Monday after an outsized US jobs report dealt another blow to hopes for more interest rate cuts, while oil extended a rally sparked by new sanctions on Russia’s energy sector.The equity sell-off tracked hefty losses on Wall Street, where all three main indexes finished more than one percent lower as the new trading year continued to falter.Keenly awaited data on Friday showed the US economy created 256,000 jobs last month, a jump from November’s revised 212,000 and smashing forecasts of 150,000-160,000.The figures followed news that the crucial US services sector picked up in December, with the prices component soaring more than expected to the highest level since last January, while another report showed job openings hit a six-month high in November.Hopes that the Federal Reserve will continue cutting rates through 2025 — having made three trims last year — were dashed when in December it indicated just two reductions over the next 12 months, down from four tipped previously.The hawkish pivot came as inflation continues to hover above the bank’s two percent target, while there are also concerns that president-elect Donald Trump’s plans to slash taxes, regulations and immigration will reignite prices.”Given a resilient labour market, we now think the Fed cutting cycle is over,” said Bank of America’s Aditya Bhave and other economists.”Inflation is stuck above target: in the December (summary of economic projections), the Fed not only marked up its base case for 2025 significantly, but also indicated that inflation risks were skewed to the upside. Economic activity is robust. “We see little reason for additional easing.”Markets in Sydney, Singapore, Seoul, Mumbai, Taipei, Manila, Bangkok and Jakarta all sank. Tokyo was closed for a holiday.Hong Kong and Shanghai also fell but pared initial losses as data showed Chinese exports and imports topped forecasts in December.London, Paris and Frankfurt fell at the open.On currency markets the pound was wallowing around lows not seen since the end of 2023 owing to fading hopes for US rate cuts as well as worries about the British economy. The euro struggled at its weakest since November 2022.Surging oil prices added to unease, with both main contracts jumping more than percent — extending Friday’s gains of more than three percent — after the United States and Britain announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft.However, commentators do not expect prices to spike too much, even amid speculation that Trump will hit Iran with fresh sanctions.”A significant and perhaps underpriced risk to crude oil prices is the potential for supply to outstrip demand, especially given OPEC+’s intention to reintroduce barrels to the market,” said Stephen Innes at SPI Asset Management.”Even if US sanctions curtail Iranian oil production by 1.5 million barrels a day — a scenario similar to that during Trump’s previous presidency — this amount could easily be compensated by OPEC+, which is currently holding back 5.8 million barrels a day, or 5.3 percent of the total global production capacity.”However, he added that some issues could lead crude to rocket, including an escalation of the Middle East crisis, a significant reduction in Russian output or exports and a strategic about-face by OPEC+ to slash production.- Key figures around 0815 GMT -Hong Kong – Hang Seng Index: DOWN 1.0 percent at 18,874.14Shanghai – Composite: DOWN 0.3 percent at 3,160.76 (close)London – FTSE 100: DOWN 0.3 percent at 8,224.50Tokyo – Nikkei 225: Closed for a holidayEuro/dollar: DOWN at $1.0216 from $1.0244 on FridayPound/dollar: DOWN at $1.2140 from $1.2210Dollar/yen: DOWN at 157.39 yen from 157.74 yenEuro/pound: UP at 84.17 pence from 83.90 penceWest Texas Intermediate: UP 1.5 percent at $77.75 per barrelBrent North Sea Crude: UP 1.4 percent at $80.86 per barrelNew York – Dow: DOWN 1.6 percent at 41,938.45 (close)

China’s exports surged to a record high in 2024, providing a much-needed boost for the economy as the prospect of biting tariffs imposed by US president-elect Donald Trump looms.Overseas shipments represented a rare bright spot for Beijing last year as sluggish domestic consumption and a prolonged crisis in the property sector dragged on growth.But Trump, who imposed sweeping tariffs on China during his first term in office, has threatened even heftier levies when he returns to the White House next week.Observers said that a recent surge in China’s exports has likely been boosted by companies ramping up stockpiles ahead of Trump’s second term amid fears of a painful trade war.”In 2024, China’s total exports exceeded 25 trillion yuan for the first time, reaching 25.45 trillion yuan ($3.47 trillion), an increase of 7.1 percent year-on-year,” Lu Daliang, spokesman for the General Administration of Customs, said at a news conference.Total imports, meanwhile, rose 2.3 percent to 18.39 trillion yuan, Lu said.Combined trade swelled five percent to reach a record 43.85 trillion yuan, said Wang Lingjun, vice minister of the customs administration.”China’s position as the world’s largest goods trading nation has become even more secure,” Wang added.Official customs data showed Monday that exports in December jumped 10.7 percent year-on-year, comfortably outperforming a forecast of 7.5 percent in a Bloomberg survey of economists.”We expect shipments to remain strong in the coming months, as US importers continue to stockpile Chinese goods ahead of tariff hikes,” Zichun Huang, China economist at Capital Economics, wrote in a note.”But exports are likely to weaken later this year as President Trump puts his tariff threats into action,” she added.Imports last month grew one percent year-on-year, customs data showed, compared with a Bloomberg forecast of a one percent decline.- ‘Resilient’ -Exports have historically represented a key driver of activity for the world’s number two economy, which officials say is likely to have grown five percent last year.During the most recent US presidential campaign, Trump threatened to slap a 60 percent tariff on all Chinese goods.China’s exports “are likely to stay resilient in the near-term”, wrote Huang.”But outbound shipments will weaken later this year if Trump follows through,” she wrote, adding that the new US tariffs “could reduce export volumes by about three percent and shave roughly 0.5 percent off China’s GDP.”Since September, Beijing has announced some of its most aggressive policy measures in years as officials try to kickstart the economy, which has so far failed to achieve a full post-pandemic recovery.The steps have included the cancellation of certain restrictions on homebuying, subsidies for the purchasing of household items and key interest rate cuts.Exports have historically represented a key driver of activity for the world’s number two economy, which officials say is likely to have grown five percent last year.”With the help of strong exports and macro policy easing, the economic momentum likely stabilised,” wrote Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note Monday following the publication of the trade figures.The government is due to release 2024 economic growth data later this week. President Xi Jinping has recently expressed confidence that the country achieved an official target of around five percent.Many economists say more policy support targeted at incentivising domestic consumption is needed to restore China’s economic health.The country narrowly avoided a slip into deflation in December, official figures showed last week, suggesting that recent measures have not yet produced a robust rebound in domestic spending.Low inflation may lead to an increase of real interest rates, said Yue Su, principal economist at the Economist Intelligence Unit. “So monetary easing policy needs to be more proactive to really reduce the borrowing cost of enterprises, which is important for a broad recovery of the economy,” she told AFP.The International Monetary Fund has previously predicted China’s economy would grow 4.8 percent in 2024 before slowing to 4.5 percent this year.