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 Wall Street looked set to open flat, according to index futures,
before a busy week of quarterly company results.
Asian shares rose. Chinese stocks jumped over 3 percent to
seven-week highs and the yuan currency hit its strongest level since
its surprise devaluation in August. Investors are looking to China's
trade figures on Tuesday to reappraise the extent of the slowdown in
the world's second-largest economy.
Despite a strong start to the fourth quarter for world stocks,
investors remain concerned about the threat of slowing global growth
even though central banks have pumped billions of dollars into their
economies.
"This global economic slowdown would be less of an issue if it was
not being made worse by deflationary pressures and did not occur at
a time when confidence in central banks' ability to provide an
effective solution is starting to be questionable," said Didier
Saint-Georges, managing director and member of the investment
committee at Carmignac.
The pan-European FTSEurofirst 300 stock index fell 0.2 percent
but held near one-month highs.
Germany's DAX, however, added 0.2 percent thanks largely to
utilities RWE and EON, which rose 11 percent and 7 percent
respectively after a government review concluded they had put aside
enough money to decommission their nuclear plants.
MSCI's broadest index of Asia-Pacific shares outside Japan was
up 0.8 percent, extending an 11 percent rise this month as investors
unwound some of their long dollar, short commodity trades and
emerging markets trades.
China's central bank took fresh steps to inject liquidity into the
struggling economy and said the stock market's correction "is almost
over".
The CSI 300 index of the largest listed companies in Shanghai
and Shenzhen closed up 3.2 percent and the Shanghai Composite added
3.3 percent.
Japanese markets were closed for a holiday.
The dollar index, which measures the greenback against a
basket of currencies, was down 0.1 percent and close to Friday's
three-week low on expectations the Fed would not raise interest
rates this year.
This was despite a number of Fed officials saying in recent days
that a first hike since 2006 could still come before the year is
out. Vice Chairman Stanley Fischer said on Sunday a rate hike this
year was "an expectation, not a commitment".
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SOFT DATA
Instead, investors have focused on soft economic data and the Fed's
concerns about global economic growth.
The euro was up 0.2 percent at $1.1380 and the yen 0.1 percent
stronger at 120.11 to the dollar.
China's yuan firmed as far as 6.3187 to the dollar, its strongest
since the Aug. 11 devaluation.
"We could get some further weakness in the dollar versus the euro
and yen but those two are mainly along for the ride. Most of the
weakness will be concentrated on emerging currencies, said Stephen
Gallo, a strategist with BMO in London."
While the Fed debates when to raise rates, the European Central Bank
is mulling looser policy. ECB President Mario Draghi said the bank
was ready to adjust the size, composition and duration of its
trillion euro asset-purchase program.
German 10-year Bund yields fell 2 basis points to just under 0.6
percent.
Oil prices rose after Kuwait's oil minister said economic growth and
the removal of high-cost producers would lead to higher prices.
Brent crude, the global benchmark, traded 16 cents higher on the day
at $52.82 a barrel.
Gold hit a seven-week high, boosted by the weaker dollar. The metal
last traded at $1,167 an ounce.
(Additional reporting by Saikat Chatterjee in Hong Kong, Marius
Zaharia in London; Editing by Tom Heneghan/Ruth Pitchford)
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