Asian shares edged down and bonds nursed small losses on Tuesday as investors braced for an eventful week that will include central bank meetings, a slew of earnings reports and key U.S. economic data.
Investors broadly expect the U.S. Federal Reserve to raise interest rates by 25 basis points (bps) on Wednesday. Interest rate announcements are due on Thursday from both the Bank of England and the European Central Bank - and both are expected to hike rates by 50 bps.
Meanwhile, more than 100 S&P 500 companies, including Apple (AAPL.O), Amazon.com (AMZN.O) and Google parent Alphabet (GOOGL.O), are expected to report results this week, which also will see the publication of closely watched U.S. employment numbers.
"It's a big week for both central banks and U.S. equities, with some of the household names due to make earnings announcements that will provide a micro overview of the macro economy," ANZ analysts said in a note.
European markets were set for a lower open, with pan-region Euro Stoxx 50 futures down 0.48%, German DAX futures falling 0.47% and FTSE futures dropping 0.29%. U.S. stock futures, the S&P 500 e-minis , were down 0.06%.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 1.1% lower. The index is up 9.9% so far this month and is on course for its best January performance since 2012.
Japan's Nikkei stock index (.N225) slid 0.23% while Australian shares (.AXJO) were down 0.15%.
China's economic activity swung back to growth in January, after a wave of COVID-19 infections passed through the country faster than expected following abandonment of pandemic controls. The official purchasing managers' index, which measures manufacturing activity, rose to 50.1 from 47.0 in December.
Investors remained cautious, however, looking for more signs of recovery in the pandemic-hit economy. China's blue-chip CSI300 index (.CSI300) was down 1% in afternoon trade after reaching a half-year high on Monday.
While Hong Kong's Hang Seng index (.HSI) dropped 1.23% on Tuesday, it was still set to post its best January performance since 1989.
On Monday, U.S. stocks lost ground, with the major indexes sinking, weighed down by declines in technology and other giant corporations' shares.
