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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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Nikkei slips, but Wall St futures bounce modestly

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Raft of US data to test market wagers on Fed rate cuts

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Trump tariff policy in doubt after court ruling

By Wayne Cole

SYDNEY, Sept 1 (Reuters) - Asian shares started the new

month in the red on Monday after a court ruling threw another

wrench into U.S. tariff policy and investors braced for a

reading on U.S. jobs that could determine the course of rate

cuts there.

A holiday in the United States made for thin conditions,

though Wall Street and European futures were still trading with

small gains after retreating on Friday.

The dollar and bonds were little moved ahead of a busy week

for data which includes surveys of manufacturing and services,

and a range of labour numbers culminating in the August payrolls

report on Friday.

Median forecasts are for an increase of 75,000, though

estimates range widely from zero to +110,000 due to the

uncertainty caused by July's surprisingly weak report, while the

jobless rate is seen ticking up to 4.3%.

Analysts also cautioned the August report has shown a bias

to undershoot forecasts over the past decade. A result in-line

or softer would cement market expectations for the Federal

Reserve to cut rates at its meeting on September 17, which

futures imply is a near 90% probability.

"Although inflation and growth data don't scream out for a

rate cut, at this stage it would likely require a significant

positive employment surprise to stop the Fed from moving

forward, given their concern about the sharp recent deceleration

in job growth," said Michael Feroli, chief U.S. economist at

JPMorgan.

The prospect of lower borrowing costs has underpinned Wall

Street near record highs, and would be timely given September

has been the worst performing month of the year for the S&P 500

over the past 35 years.

Early Monday, S&P 500 futures were up 0.2%, while

Nasdaq futures added 0.3%. EUROSTOXX 50 futures

firmed 0.3%, while FTSE futures rose 0.1% and DAX

futures gained 0.3%.

Japan's Nikkei fell 0.9%, tracking a drop in U.S.

tech stocks on Friday, while South Korea's market slipped 0.5%

.

IS IT LEGAL?

MSCI's broadest index of Asia-Pacific shares outside Japan

inched down 0.1%, having hit a four-year high

last week on the back of a bull run in Chinese stocks.

Trade uncertainty remained a drag after a U.S. Court of

Appeals ruled many of President Donald Trump's sweeping tariffs

were illegal, but left them in place until mid-October awaiting

an appeal to the Supreme Court.

The White House has other means to apply sectoral levies but

it puts a question mark over trade agreements already reached or

being negotiated. Talks with Japan have hit a stumbling block

over rice, while negotiations with South Korea have bogged down.

"If the Supreme Court upholds the ruling, the Treasury would

still need to return most of the now-close to $100 billion in

additional customs duties collected over the past five months,

and there is a danger that other countries would back-track on

any preliminary agreements," noted Paul Ashworth, chief North

America economist at Capital Economics.

Investors will also be wary of Trump's attacks on the

independence of the Fed this week, with Fed Governor Lisa Cook

set to file fresh arguments against her firing on Tuesday.

A confirmation hearing for Stephen Miran, Trump's pick for

another Fed position, is scheduled for Thursday.

The political pressure for faster rate cuts has been a drag

on the U.S. dollar, which was pinned at 97.788 having

shed 2.2% last month. The euro edged up 0.1% to $1.1697

, while the dollar held at 147.17 yen.

In commodity markets, gold has benefited from the dollar's

decline and the outlook for lower rates to rise 2.2% last week.

The metal was just off a four-month top at $3,444 an ounce

.

Oil prices were on the defensive ahead of a planned increase

in output from OPEC+ in coming months.

Brent dropped 0.2% to $67.35 a barrel, while U.S.

crude eased 0.2% to $63.89 per barrel.