Asian shares showed slight gains on Monday as investors speculated that the Federal Reserve would not raise interest rates further and as hopes rose for policy stimulus in China. However, trading was slow due to a holiday in the United States. Key economic data for the week includes U.S. services and Chinese trade and inflation figures. In addition, more policy action is expected from Beijing, including easing restrictions on home buying. Property developer Country Garden received approval from its creditors to extend payments for an onshore private bond, providing some relief. The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent, while Japan’s Nikkei increased by 0.2 percent. The Topix, which reached its highest level in 33 years last week, still has a lower price-to-earnings ratio compared to the S&P 500 and Nasdaq. Investor sentiment in the tech sector will be tested by chip giant Arm Holdings’ initial public offering this week. S&P 500 futures and Nasdaq futures were mostly unchanged. The positive August payrolls report on Friday strengthened expectations for an end to rate hikes, although downward revisions to previous months and a dip in wage growth suggested a loosening labor market. Goldman Sachs analysts believe the July hike was the last one for the cycle and expect unchanged policy at the September and November FOMC meetings. Futures now imply a 93 percent chance of steady rates this month and a 67 percent probability that the tightening cycle is over. Longer-dated yields rose on Friday after rallying initially on jobs data. Several Federal Reserve officials are scheduled to speak this week before the next policy meeting on September 19-20. Central banks in Canada and Australia are also holding meetings this week, with both expected to keep rates steady. The dollar remained strong against the yen, close to its 10-month peak, while the euro was vulnerable near its recent low. In commodities, gold benefited from reduced risk of a U.S. rate hike, while oil prices were near seven-month highs due to tightening supply. Saudi Arabia is likely to extend its voluntary oil production cut into October.
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