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

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Nikkei goes flat, Wall St futures dip

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Caixin PMI rises to 50.4, other PMIs also improve

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Dollar holds ground after yields rise, yen steadies

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Payrolls data could decide size of Fed rate cut

(Updates prices)

By Wayne Cole

SYDNEY, Sept 2 (Reuters) - Share markets were subdued in

Asia on Monday as investors braced for a data-packed week

culminating in a U.S. jobs report that could decide whether a

rate cut expected this month will be regular or super-sized.

A holiday in the United States and Canada made for thin

liquidity, while wins for far-right parties in German state

elections added a fresh layer of political uncertainty.

The dollar clung to much of the gains made on Friday after

upbeat spending figures led markets to trim the chance of a

half-point easing from the Federal Reserve.

Futures are 100% priced for a cut of 25 basis points

on Sept. 18, and imply a 33% probability of 50 basis points.

They also have 100 basis points of cuts priced in by December,

and 120 basis points for 2025.

The Bank of Canada is expected to cut again on Wednesday,

with markets implying a 22% chance of 50 basis points.

Crucial for the Fed will be the payrolls report on Friday

where analysts look for a rise of 165,000 in jobs and a dip in

the unemployment rate to 4.2%.

"The risks going into this crucial release seem highly

asymmetric as a solid report is very unlikely to derail the

September cut," said Barclays economist Christian Keller.

"In contrast, a weak report would likely validate the

popular narrative that the U.S. economy and labour market are on

the precipice, necessitating a fast and deep cutting cycle,

leading to another sharp repricing."

Fed Governor Christopher Waller and NY Fed President John

Williams happen to be speaking after the job data, giving the

market a near-instant reaction.

Also important this week will be the ISM surveys, JOLTS job

openings and ADP employment, trade and the Fed's Beige Book.

Those risks kept investors cautious with S&P 500 futures

off 0.1% and Nasdaq futures down 0.2%.

DOLLAR FINDS SUPPORT

EUROSTOXX 50 futures were flat, while FTSE futures

added 0.3%.

Asian markets struggled to follow Friday's rally on Wall

Street with Japan's Nikkei erasing early gains to stand

almost unchanged, having jumped 8.7% last week.

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

dipped 0.4%, while South Korean stocks

edged up 0.3%.

Chinese blue chips lost 1.2%, led by losses in

real estate after a survey showed home prices growth had slowed.

Shares of New World Development ( NWWDF ), a major Hong Kong

property developer, dived 14% after it estimated a net loss.

The Caixin survey of manufacturing showed a pick up to 50.4

in August, topping forecasts of 50.0. Surveys on Japan and South

Korea factories both showed an improvement in activity.

Cash Treasuries were untraded for the holidays, while

Treasury futures were little moved. Ten-year yields

stood at 3.914% after rising in the wake of Friday's

inflation and spending data.

That rise underpinned the U.S. dollar at 146.08 yen

, having rallied 1.2% last week, and it now faces chart

resistance around 148.54.

The euro was stuck at $1.1045, after losing 1.3%

last week, with political uncertainty in Germany not helping.

The European Central Bank (ECB) is considered certain to cut

its rates by a quarter point next week following benign EU

inflation figures.

"However, the path after is less clear with financial

markets currently pricing around 1-1/2 cuts over the remaining

two meetings of the year," said Joseph Capurso, head of

international economics at CBA.

"We have one more cut in 2024 after September, but

acknowledge that it will be a close call between one or two more

cuts."

The firmer dollar combined with higher bond yields to

pressure gold prices at $2,497 an ounce, short of its

recent all-time top of $2,531.60.

Oil prices lost more ground as the market pondered the

prospect of increased supply from OPEC+ in October.

Brent fell 59 cents to $76.34 a barrel, while U.S.

crude lost 51 cents to $73.04 per barrel.