Asian markets struggled as investors prepared for the anticipated interest rate cut by the Federal Reserve this week, while new weak data showed that the Chinese economy continues to face serious difficulties, AFP reported.

In recent weeks, stocks have enjoyed steady growth as a series of employment and inflation data gave the U.S. central bank enough grounds to resume cutting interest rates.

The decision follows data showing that the labor market continues to weaken, while prices have not risen as sharply as feared after the trade war led by President Donald Trump. Expectations are that the Fed will lower borrowing costs by 25 basis points, although some observers predict the possibility of a 50-point cut.

“I think you’re in for a big cut. This is a perfect time for a reduction,” Trump said.

“The market would be surprised if we saw anything other than a 25 basis point cut by the Fed, even if a few governors vote for 50 points,” commented Chris Weston of Pepperstone. According to him, attention will focus on the tone of the board’s statement and on the guidance to be given by Chairman Jerome Powell at the press conference.

This week, the central banks of Canada, the United Kingdom, and Japan will also hold meetings.

In Asia, markets wavered after sluggish trading on Wall Street, where the Nasdaq reached a new high. Shanghai and Hong Kong fell following the release of data showing weaker-than-expected growth in retail sales and industrial production in China.

“Given the slowdown in recent months, we expect a serious need for additional short-term stimulus,” said Lin Song, Chief Economist for Greater China at ING. Sheana Yue of Oxford Economics warned that “the economy could collapse in the fourth quarter if the weak pace of July and August continues, once again highlighting the urgent need for stimulus.”

Losses were recorded in Singapore, Sydney, Taipei, Manila, and Wellington. Seoul, however, reached a new record after authorities scrapped a plan to lower the threshold for taxing capital gains from shares. Jakarta and Bangkok also rose, while Tokyo remained closed due to a holiday.

In Europe, London, Paris, and Frankfurt began the day higher. In Sydney, ANZ Bank retreated after agreeing to pay a record fine of 240 million Australian dollars (159.5 million U.S. dollars) over “widespread violations.”

Talks between China and the U.S. in Madrid are also in focus, covering a range of issues, including trade, with the November deadline for renewing the tariff moratorium approaching. Chinese Vice Premier He Lifeng and his team will also discuss the TikTok dispute with the U.S. delegation, led by Treasury Secretary Scott Bessent. The talks come days after Beijing launched two investigations into the American semiconductor sector.

Key indices as of 07:15 GMT:
Hong Kong – Hang Seng: -0.1% to 26,374.12
Shanghai – Composite: -0.3% to 3,860.50 (close)
Tokyo – Nikkei 225: closed due to holiday
London – FTSE 100: +0.2% to 9,299.19
Euro/Dollar: $1.1727 from $1.1731
Pound/Dollar: $1.3566 from $1.3560
Dollar/Yen: ¥147.53 from ¥147.67
Euro/Pound: £0.8644 from £0.8652
WTI: +0.5% to $62.97 per barrel
Brent: +0.4% to $67.28 per barrel
New York – Dow Jones: -0.6% to 45,834.22 (close) | BGNES