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Wall St futures up 0.1%, Nikkei closed for holiday

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Euro shows little reaction to Fitch downgrade of France

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Rate cuts seen from Fed, BoC; steady for BoE, BOJ

(Updates prices as of 0520 GMT before European open)

By Wayne Cole

SYDNEY, Sept 15 (Reuters) - Asian shares steadied near

four-year highs on Monday ahead of an action-packed week that is

seemingly certain to see the U.S. Federal Reserve resume its

easing cycle, and perhaps leave the door wide open to a series

of cuts.

The Bank of Canada is also expected to cut rates by a

quarter point this week, while the Bank of Japan and the Bank of

England also meet and are both expected to hold rates steady.

European stocks are headed for a slightly firmer open, with

EUROSTOXX 50 futures 0.3% higher. S&P 500 futures

and Nasdaq futures were both up 0.1%.

Markets are 100% priced for an easing of 25 basis points

from the Fed, taking its funds rate to 4.0-4.25%, with futures

implying just a 4% chance of 50 basis points.

Just as important will be Fed members' "dot plot"

projections for rates and guidance from Fed Chair Jerome Powell

on the extent and pace of any further easing.

Futures already have 125 basis points of cuts priced in by

late 2026, so anything less than dovish will disappoint

investors.

"The key question for the September FOMC meeting is whether

the Committee will signal that this is likely the first in a

series of consecutive cuts," said David Mericle, chief U.S.

economist at Goldman Sachs.

"We expect the statement to acknowledge the softening in the

labor market but do not expect a change to the policy guidance

or a nod to an October cut."

U.S. President Donald Trump continued his attacks on the

central bank on Sunday, saying Powell was incompetent and

hurting the housing market.

A holiday in Japan made for some thin trading conditions in

Asia on Monday, with the euro showing scant reaction to Fitch's

downgrade of France.

The single currency was holding steady at $1.1732,

a short way from its recent top of $1.1780. The dollar was off

0.15% on the yen at 147.44, but well within the 146.22

to 149.13 range of the past month or so.

The euro has been underpinned by a steady outlook for EU

rates, with the European Central Bank signalling last week it

was in a "good place" on policy. A host of ECB officials are due

to speak this week, including President Christine Lagarde.

CHINA DATA MISSES

While the Nikkei was shut for the holiday,

futures stood at 44,520, just below the cash close of

44,768, having climbed more than 4% last week.

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

was last flat, although it did hit a new

four-year high earlier in the session.

South Korea's market rose 0.4% to hit another

record high after the government scrapped a plan to raise taxes

on stock investment.

Chinese shares outperformed, with blue chips up

0.5% and Hong Kong's Hang Seng index 0.2% higher as

investors redoubled bets on Chinese tech shares amid Sino-U.S.

trade talks.

U.S. and Chinese officials concluded a first day of

talks in Madrid on Sunday on their strained trade ties, and will

resume them later on Monday. Trump said he was still negotiating

on the divestiture deadline for Chinese short-video app TikTok.

Data released on Monday showed the Chinese economy lost some

momentum in August, with a slew of activity indicators - from

industrial output to retail sales - coming below forecasts.

Falls in property investment deepened, while home prices

declined another 0.3% in August, extending a downward trend that

has persisted since early 2023.

"Given the slowdown of the past few months, we expect that

there's a strong case for additional short-term stimulus

efforts," said Lynn Song, ING's chief economist, Greater China.

"We continue to see a high possibility for another 10bp

rate cut and 50bp reserve-requirement-ratio cut in the coming

weeks."

In the commodities market, oil prices extended gains on

Monday as investors assessed the impact of Ukrainian drone

attacks on Russian refineries that could disrupt its crude and

fuel exports.

Brent rose 0.5% to $67.33 a barrel, while U.S. crude

firmed 0.5% to $63 per barrel.

Gold was flat at $3,644 an ounce, not far from last

week's all-time high of $3,673.95.

The cash Treasuries market was closed due to the holiday in

Japan. Yields on 10-year Treasuries last stood at

4.07%, having hit a five-month low of 3.994% last week as a run

of soft labour data added to the case for aggressive Fed easing.