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(Bloomberg) — Asian stocks were poised for a steady open Tuesday, with investors holding their nerve as concerns mount over China’s economic woes.

Futures show small gains for equity benchmarks in Tokyo and Hong Kong, while shares in Sydney look flat. US contracts show little change for when Wall Street trading resumes later Tuesday after the Labor Day public holiday. Oil edged higher.

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Traders in Asia will be keeping a close eye on fresh signs of economic troubles in China. Data on Monday showed Chinese factory activity had contracted for a fourth straight month in August, the latest signal that the world’s second-largest economy may struggle to meet this year’s growth target. 

The slowdown in China has highlighted the urgency of fresh government stimulus, while inventories of key raw materials from steel to soybeans are piling up in the nation’s warehouses — evidence that economic activity remains too feeble to clear surpluses. 

“I think there’s a huge problem — by now everybody recognizes that,” Hao Ong, chief economist at Grow Investment Group, said in an interview. “The government needs to do substantially more.”

While traders globally will approach this month with caution, as data shows September has been a poor month for stocks in recent years, the upcoming US jobs report on Friday could be a factor on whether history repeats itself. It will provide crucial insights into how quickly or slowly the Federal Reserve might cut rates and as the US election campaign gets into full swing.

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Traders are pricing the US easing cycle will begin this month, with a roughly one-in-four chance of a 50 basis-point cut, according to data compiled by Bloomberg. The equity market rally could stall even if the Fed initiates a rate cut, JPMorgan Chase & Co. strategists cautioned, as any policy easing would be in response to slowing growth, while the seasonal trend for September would be another impediment, the team led by Mislav Matejka wrote in a note.

“We are not out of the woods yet,” Matejka said, reiterating his preference for defensive sectors against the backdrop of a pullback in bond yields. “Sentiment and positioning indicators look far from attractive, political and geopolitical uncertainty is elevated, and seasonals are more challenging.”

Jobs data potentially pointing to a very gradual cooling down of the US labor market could lead traders to adjust their expectations for rate cuts to the benefit of the dollar, according to to Valentin Marinov, head of G-10 FX strategy at Credit Agricole CIB.

“The markets may be leaning too dovish into the September Fed meeting,” Marinov told Bloomberg Television. “The dollar could recoup some ground once the markets realized that the Fed will move more cautiously.” 

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In commodities, oil fluctuated between small gains and losses on Monday as traders weigh a planned production increase from OPEC+ next month, economic headwinds in China and lower output in Libya.

Key events this week: 

• South Korea CPI, Tuesday
• Switzerland GDP, CPI, Tuesday
• South Africa GDP, Tuesday
• US construction spending, ISM Manufacturing index, Tuesday
• Mexico unemployment, Tuesday
• Brazil GDP, Tuesday
• Chile rate decision, Tuesday
• Australia GDP, Wednesday
• China Caixin services PMI, Wednesday
• Bloomberg CEO Forum in Jakarta, Wednesday
• Eurozone HCOB services PMI, PPI, Wednesday
• Poland rate decision, Wednesday
• Fed’s Beige Book, Wednesday
• Canada rate decision, Wednesday
• South Korea GDP, Thursday
• Malaysia rate decision, Thursday
• Philippines CPI, Thursday
• Taiwan CPI, Thursday
• Thailand CPI, Thursday
• Eurozone retail sales, Thursday
• Germany factory orders, Thursday
• US initial jobless claims, ADP employment, ISM services index, Thursday
• Eurozone GDP, Friday
• US nonfarm payrolls, Friday
• Canada unemployment, Friday
• Chile CPI, Friday
• Colombia CPI, Friday

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Some of the main moves in markets: 

Stocks

• S&P 500 futures were little changed as of 7:31 a.m. Tokyo time
• Hang Seng futures rose 0.1%
• S&P/ASX 200 futures were little changed
• Nikkei 225 futures rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1073
• The Japanese yen was little changed at 146.88 per dollar
• The offshore yuan was little changed at 7.1143 per dollar

Cryptocurrencies

• Bitcoin rose 0.2% to $59,103.88
• Ether fell 0.2% to $2,548.70

Commodities

• West Texas Intermediate crude rose 0.2% to $73.68 a barrel
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

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