* European stocks dip on weaker euro zone, China data
* Wall Street set for fall, data expected to be weak
* Asian shares inch up, led by Japan, Australia
* Japan bond yield plunge to record low, 2-yr at -0.10 pct
* Oil fades after recent gains
By Marc Jones
LONDON, Feb 1 (Reuters) - Markets got February off to a
cautious start on Monday after a rocky January, as expectations
of more cheap money from some of the world's top central banks
were validated by fresh signs of weak global growth.
European stocks .FTEU3 extended losses before the U.S.
open, after disappointing euro zone manufacturing data
dovetailed with the fastest contraction in China's giant factory
sector in over three years L8N15G19G .
Wall Street ESc1 1YMc1 was expected to open 0.3 to 0.4
percent lower, with all eyes on soon-to-be-released
manufacturing data there ECONG7 and oil prices wobbling again
after a rally over the last two weeks. O/R
January manufacturing surveys from Asia and Europe showed
the new year began much as the old one ended - too much capacity
chasing too little demand. Economists were expecting a similar
picture from the U.S.
"My main question is will the U.S. economy be able to
continue to grow just through the services sector when the
manufacturing sector is having such a tough time," said Rabobank
U.S. focused economist Philip Marey.
"The Q4 GDP data was really weak ... Today we get the ISM
manufacturing figures, which we are expecting to be soft and so
that will leave us just waiting for Friday and the payrolls."
Friday's surprise move by Japan to cut interest rates to
negative levels continued to provide support. Japanese
government bond yields hit record lows, and bets the European
Central Bank will cut its rates again next month also sent
German five-year bond yields DE5YT=TWEB to all-time lows.
GVD/EUR
In currency markets, the yen had steady at around 121.20 to
the dollar JPY= and 131.40 to the euro EURJPY= . Friday's BoJ
move set off its biggest one-day fall - roughly 2 percent- in
over a year. FRX/
Elsewhere, oil-rich Canada's dollar fell half a percent
against its U.S. counterpart CAD=D4 after the weak economic
data dragged oil prices LCOc1 down from overnight highs as
high as $36 a barrel. Fellow oil exporter Norway's currency
slipped 0.3 percent versus the euro.
"The broader macro focus is on the back of the BOJ and
whether that's going to pull the other key central banks with
it," said Bank of Tokyo-Mitsubishi UFJ strategist Derek Halpenny
in London.
"In that sense, the data over the week ahead is going to be
pretty crucial, and that's where we are going to get our
direction ... That's why we're sitting where we are with not too
much price action."
SLIPPY OIL
MSCI's 46-country All World share index .MIWD00000PUS ,
which lost over 6 percent last month in its worst start to a
year since the height of the global financial crisis in 2008,
was slipping back towards the red before U.S. trading began.
The earlier data showed China remaining the epicentre of the
weakness. It also encompassed such bellwethers of high-tech
trade such as South Korea and Taiwan in Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up a modest 0.1 percent overnight, after
losing 8 percent in January.
Japan .N225 , thanks to last week's BOJ easing, and
Australia .AXJO led regional markets with respective gains of
2 and 0.8 percent. Chinese stocks .SSEC .CSI300 slipped 1.5
to 1.7 percent after the weak data there had strengthened calls
for more stimulus.
The Shanghai market dropped more than 10 percent last month
and Monday's surveys showed growth slowing in both manufacturing
and services
"In the short term, the surprise move by Japan will be a
catalyst for global equities, but it only underlines the
weakness of the global economy and we need to see some strong
economics data for a sustainable rally," said Cliff Tan, head of
global markets research with Bank of Tokyo-Mitsubishi UFJ.
Europe's weakness came despite the fiercest price cutting by
firms in a year. Even British factories, which did enjoy a
brighter start to the year than expected, saw companies cutting
staff at the fastest rate in three years and export orders
falling despite a weaker sterling GBP= .
Oil prices, the other major factor this year, remained a key
focus. Brent dipped as afternoon European trading began, but at
just $35 per barrel LCOc1 it was still up from Friday and more
than 30 percent better than its 12-year low of almost $27 less
than two weeks ago.
It was under pressure again though as a senior OPEC source
told a Saudi Arabian newspaper it was too early to talk about an
emergency meeting of the Organization of the Petroleum Exporting
Countries (OPEC) to stem the drop in prices
Crude jumped last week after Russian energy officials said
Saudi Arabia had made proposals to manage output and was ready
to talk.
"We do not expect such a cut will occur unless global growth
weakens sharply from current levels, which is not our
economists' forecast," investment bank Goldman Sachs (N:GS) said in a
report.
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Oil prices http://link.reuters.com/beb23v
China PMIs http://link.reuters.com/zut45w
Commodities performance http://link.reuters.com/rac73w
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