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

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Holidays in Asia make for quiet start to busy week

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Futures imply 59% chance of outsized Fed rate cut

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China data disappoints, adding to case for stimulus

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Trump safe after FBI prevents second assassination attempt

(Updates prices)

By Wayne Cole

SYDNEY, Sept 16 (Reuters) - Asian stocks dithered and

the dollar slipped on Monday in a week that is almost certain to

see the start of an easing cycle in the United States with

investors flirting with the chance of an outsized move.

Central banks in Japan and the UK also meet this week, with

both expected to stand pat for now, while a packed data schedule

includes U.S. retail sales and industrial production.

Geopolitics loomed large as ever with Republican

presidential candidate Donald Trump the subject of a second

assassination attempt on Sunday according to the FBI.

Holidays in China, Japan, South Korea and Indonesia made for

thin conditions and early moves were modest. MSCI's broadest

index of Asia-Pacific shares outside Japan

gained 0.3%, after bouncing 0.8% last week.

Japan's Nikkei was shut but futures traded at 36,315

compared to a cash close of 36,581 as recent yen gains

pressured exporters. S&P 500 futures were little changed,

while Nasdaq futures dipped 0.1%.

EUROSTOXX 50 futures added 0.2% and FTSE futures

0.1%. DAX futures also firmed 0.1%.

Economic data from China over the weekend disappointed as

industrial output growth slowed to a five-month low in August,

while retail sales and new home prices weakened further.

"The data bolsters the case for additional economic stimulus

by year-end if China wants to achieve its target of around 5%

growth in 2024," said Vivek Dhar, a mining & energy analyst at

CBA.

"We think policymakers will look to boost central government

spending on infrastructure projects if both China's property and

infrastructure sectors sink again in September."

As for the Federal Reserve, futures rallied early to

push the chance of a half-point cut to 59%, against 30% a week

ago. The odds have narrowed sharply after media reports revived

the prospect of a more aggressive easing.

"We agree it is likely to be a close call, but we also

believe the Fed will make the 'right' move and go 50bp," said

JPMorgan economist Michael Feroli.

"The case for a 50bp cut seems clear to us: various

iterations of a Taylor Rule imply policy is currently a full

percentage point or more too restrictive," he added.

If the Fed does go by half a point, Feroli expects policy

makers to also project 100 basis points of cuts this year and

150 basis points for 2025.

The market has 114 basis points of easing priced in by

Christmas and another 142 basis points for next year.

YEN ON A ROLL

Analysts at ANZ noted that in the last three decades there

have been three easing cycles that started off with a cut of

more than 25bp, but in each there were concerns about a market

rout leading to recession, which is not the case now.

Just the chance of an aggressive move saw bonds rally

broadly, with two-year Treasury yields down at 3.593%

having scored the lowest close since September 2022.

The Bank of England is generally expected to leave rates on

hold at 5.00% when it meets on Thursday, though markets have

priced in a 31% chance of another cut.

The Bank of Japan meets on Friday and is widely expected to

hold steady, though it may lay the groundwork for a further

tightening in October.

South Africa's central bank is also tipped to ease policy

this week, while Norway is seen holding steady.

The drop in Treasury yields has boosted the yen against the

dollar, which eased to a near nine-month trough at 140.25 yen

having slipped 0.9% last week.

The euro was steady at $1.1096, with the prospect

of more rate cuts from the European Central Bank keeping a lid

on the currency at $1.1200.

The Canadian dollar held at 1.3580 per U.S. dollar

after Bank of Canada Governor Tiff Macklem opened the door to

faster rate cuts in an interview with the Financial Times.

Lower bond yields underpinned gold, which stood at $2,582 an

ounce and near an all-time peak of $2,588.81.

Oil prices were mixed as nearly a fifth of crude oil

production in the Gulf of Mexico remained offline.

Brent fell 4 cents to $71.57 a barrel, while U.S.

crude firmed 7 cents to $68.72 per barrel.