Asian markets started the week cautiously on Monday, with indexes showing mixed performance. EUROSTOXX 50 futures rose 0.1%, while FTSE futures slipped 0.1% and DAX futures stayed flat. In the U.S., S&P 500 and Nasdaq futures were little changed.
In Asia, Japan's Nikkei was shut for a holiday, but futures traded at 44,590, slightly below the cash close of 44,768 after a 4% jump last week. South Korea's KOSPI hit another record, the MSCI Asia-Pacific index outside Japan was flat, Chinese blue chips gained 0.5%, and Hong Kong's Hang Seng added 0.2%.
Traders are focused on an eventful week for central banks. The U.S. Federal Reserve is expected to resume interest rate cuts, with markets pricing in a 25-basis point reduction to bring the funds rate to 4.0–4.25%. Futures show a 4% chance of a bigger half-point cut. Investors are waiting for the Fed's "dot plot" projections and comments from Chair Jerome Powell, which could shape expectations for further easing.
Analysts believe Powell may highlight rising risks to employment after soft U.S. jobs data. Citi's chief U.S. economist, Andrew Hollenhorst, said Powell could signal cuts at upcoming meetings, with futures already pricing in around 125 basis points of reductions this year. Anything less than a dovish outlook could disappoint investors.
Other central banks are also in focus. The Bank of Canada is likely to cut rates by a quarter point this week, while the Bank of Japan and the Bank of England are expected to hold steady. Traders remain split on whether Norway's Norges Bank will make a move.
In currency markets, the euro held steady at $1.1728 despite France's downgrade by Fitch, while the dollar traded at 147.58 yen, within last month's range. The European Central Bank signaled stability, with President Christine Lagarde and other officials scheduled to speak this week.
Economic data from China showed slowing momentum in August. Industrial output rose 5.2%, down from 5.7% in July, while retail sales increased just 3.4%. Property investment declined further, and home prices fell 0.3% for the month, extending a long slump.
Meanwhile, U.S. and Chinese officials met in Madrid to discuss trade ties, with talks set to continue Monday. Former President Donald Trump repeated his criticism of Fed Chair Powell and pushed for tariffs on Chinese imports over its purchases of Russian oil.
Oil prices edged higher, with Brent crude at $67.27 a barrel and U.S. crude at $63. Gold slipped 0.1% to $3,639 an ounce, near last week's record high of $3,673. U.S. Treasury yields stood at 4.07%, close to a recent five-month low, as weaker labor data supported the case for more Fed cuts.
(With inputs from agencies)
