This week promises to be eventful in the global financial markets as key economic indicators and industry showcases take center stageAmong the noteworthy highlights, the U.S. non-farm payroll data is set to be released on January 10th, while the 2025 CES International Consumer Electronics Show will take place in Las Vegas from January 7th to 10thAnticipations are high around technology giant Nvidia, which is expected to unveil its entrance into the AI PC marketAdditionally, U.S. markets will observe a trading halt on January 9th, prior to the Federal Reserve's release of the minutes from its December 2024 monetary policy meeting, which will be shared in the early hours of Thursday for those in the Beijing time zone.

According to financial analysts, the current high valuations of U.S. stocks indicate that there remains space for further digestion, hinting at the potential for continued market volatility in the near futureLast week, the U.S. stock market experienced a pullback, largely influenced by the fluctuations in U.STreasury yields and the strengthening dollar index, which put pressure on risk assetsThis resulted in declines of 0.60% for the Dow Jones Industrial Average, 0.48% for the S&P 500, and 0.52% for the NasdaqIn contrast, commodities such as gold and oil showed stronger performance amid these market shifts, leading to a dollar index increase of 0.88% to 108.95.

Market sentiment is leaning towards the expectation that the Federal Reserve will continue to lower interest rates in 2025 in an effort to bolster economic growthThis speculation was further fueled by comments from multiple Fed officials in the first week of January, which reiterated the central bank's commitment to supporting the U.S. economy amidst global uncertainties.

In terms of new economic data, recent reports indicated a relatively robust performance from the U.S. economy, aided in part by a new congressional sessionThese developments, coupled with ongoing trading dynamics, have continued to push the dollar index higher and U.S

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Treasury yields remained in high territoryObserving the factors affecting the changes in the 10-year Treasury yield over the past week, the contribution from neutral rates was more significant, while term premiums remained elevated, suggesting that the momentum supporting high Treasury yields had not significantly improved.

Historically, when the 10-year Treasury yield surpasses 4.5%, the U.S. stock market tends to face certain headwinds in terms of pullback pressureTypically, the duration of stock market corrections under high interest rates is limited, and their magnitude tends to correlate positively with the uptrend of Treasury yieldsThe current high rate environment and uncertainty surrounding U.S. policy may imply a likelihood of short-term corrections for equities.

As we look forward to the events scheduled for this week, numerous pivotal occurrences are set to unfoldThe CES 2025 in Las Vegas promises a showcase of groundbreaking technological advancementsNvidia's CEO Jensen Huang will deliver a keynote address on January 6th at 6:30 PM PST, with expectations of announcing a new line of RTX graphics cards, namely the RTX 5090/5080, during the exhibition.

Also, on January 10th, the U.SDepartment of Labor will release the much-anticipated report on non-farm employment for December 2024. Analysts anticipate an increase of approximately 160,000 jobs projected for that monthThe labor market has faced disruptions from hurricanes and strikes in previous months, resulting in notable data volatilityHowever, it appears that the labor market is now regaining its footingShould the non-farm payroll align with expectations, the average monthly job growth for 2024 would be near 180,000—a figure that, while lower than the averages of the previous three years, still signals a robust growth trend for the U.S. job marketThis resilience in employment is vital to observe as it will significantly shape the trajectory of U.S. economic policy and market fluctuations.

With lofty market valuations persisting, many investors remain cautious

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