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

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Nikkei extends rally, Wall St futures flat

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Caixin PMI rises to 50.4, other PMIs also improve

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Dollar holds gains as yields rise, yen eases

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Payrolls data could decide size of Fed rate cut

(Adds China data, updates prices)

By Wayne Cole

SYDNEY, Sept 2 (Reuters) - Asian share markets got off

to a quiet start 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 was hanging on to 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

and Nasdaq futures little changed.

DOLLAR FINDS SUPPORT

EUROSTOXX 50 futures were flat, while FTSE futures

added 0.3%.

Asian markets mostly followed Friday's rally on Wall Street,

with Japan's Nikkei up 0.5% and adding to last week's

8.7% bounce.

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

barely moved, while South Korean stocks

edged up 0.1%.

Chinese blue chips dipped 0.6%, led by losses in

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

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 146.20 yen

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

resistance around 148.54.

The euro was stuck at $1.1054, 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 42 cents to $76.51 a barrel, while U.S.

crude lost 38 cents to $73.17 per barrel.