Asia stocks subdued, euro rebounds to one-week high ahead of ECB

TOKYO Wed Nov 6, 2013 6:51pm EST

1 of 7. A visitor walks past logos at the Tokyo Stock Exchange in Tokyo June 13, 2013.

Credit: Reuters/Toru Hanai

TOKYO (Reuters) - Asian stocks got off to sluggish start on Thursday as investors hunkered down to take the latest pulse on the U.S. economy and implications for the Federal Reserve's easy money policy, while the euro perked up ahead of the European Central Bank meeting.

All eyes will be on Friday's nonfarm payrolls data for further gauge on when the Fed will begin winding down its $85 billion-a-month bond-buying program.

Before that, investors will look to the first reading of U.S. third-quarter GDP data later in the day. Economists in a Reuters survey forecast a 2.0 percent annualized pace of growth compared with a 2.5 percent rate in the second-quarter.

"Markets were range bound ahead of the ECB and U.S. GDP data tonight, and U.S. payrolls on Friday," ANZ bank analysts said in a note.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched down 0.1 percent after snapping a four-day losing streak on Wednesday with a flat performance.

The single currency hovered near one-week highs against the dollar as strong German data prompted investors to scale back expectations of an ECB rate cut at its policy meeting later in the global day.

"Had the PMIs stepped down sharply, the ECB could have justified a cut, especially given last week's inflation print," analysts at JPMorgan wrote in a note.

"The recent data enables them to wait till December and announce the rate cut as part of their broader inflation/growth forecasting exercise."

The euro was steady at $1.3515, having risen 0.3 percent on Wednesday on the back of the slight shift in expectations.

The single currency was also aided by new research papers from two of the Fed's top staff economists for more aggressive action by the U.S. central bank to drive down unemployment by promising to hold interest rates lower for longer.

That helped drive U.S. stocks firmer overnight, with the Dow Jones industrial average .DJI at a record high, while the S&P 500 .SPX index closed shy of its own record. .N

U.S. S&P E-mini futures dipped 0.2 percent in early Asian trade on Thursday.

Australian shares .AXJO slipped 0.2 percent as index heavyweights National Australia Bank Ltd (NAB.AX) and Australia and New Zealand Banking Group Ltd (ANZ.AX) traded without the right of dividend.

Among commodities, U.S. crude prices added 0.1 percent to around $94.9 a barrel, building on Wednesday's 1.7 percent from four-month lows on unexpectedly large fall in U.S. fuel supplies. <O/R>

Gold took a pause after gaining 0.5 percent overnight to around $1,318 an ounce.

(Additional reporting by Thuy Ong in Sydney; Editing by Shri Navaratnam)