Stocks and dollar hold firm at start of action-packed week

*Wall St futures broadly steady, European stocks up

*Euro shows little reaction to Fitch downgrade of France

*Rate cuts seen from Fed, BoC; steady for BoE, BOJ

Global shares held near record highs on Monday at the start of an action-packed week that looks certain to see the U.S. Federal Reserve resume its easing cycle, and perhaps leave the door open to a series of interest rate cuts.

The Bank of Canada is also expected to cut rates by a quarter point this week, while the Bank of Japan and the Bank of England are both seen holding rates steady.

MSCI's all-country index hovered just shy of last week's record high, while stocks in Europe rose 0.5% on the day. S&P 500 futures and Nasdaq futures were up 0.1-0.2%.

Markets expect a quarter-point cut from the Fed, which would take its funds rate to 4.0-4.25%, with futures implying just a 4% chance of 50 basis points.

Key too will be Fed members' "dot plot" projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing.

Futures already have 125 basis points of cuts priced in by late 2026, so anything less than dovish will disappoint investors.

"The key question for the September FOMC meeting is whether the Committee will signal that this is likely the first in a series of consecutive cuts," said David Mericle, chief U.S. economist at Goldman Sachs.

"We expect the statement to acknowledge the softening in the labor market but do not expect a change to the policy guidance or a nod to an October cut."

U.S. President Donald Trump continued his attacks on the central bank on Sunday, saying Powell was incompetent and hurting the housing market.

"Uncertainty surrounding the future path for Fed policy means that some traders are now bracing for volatility around Wednesday’s Fed decision, with options markets pricing in a 1% swing in either direction, which would be one of the biggest daily moves in weeks," XTB research director Kathleen Brooks said.

Meanwhile, the euro shrugged off Fitch's downgrade of France late last week, rising 0.2% to $1.1754. It was a touch weaker against sterling, trading at 86.4 pence, down 0.1% on the day .

The euro has been underpinned by a steady outlook for EU rates, with the European Central Bank signalling last week it was in a "good place" on policy. A host of ECB officials are due to speak this week, including President Christine Lagarde.

Elsewhere, the dollar eased 0.2% against the yen to 147.39 , while the Norwegian crown rose to multi-month highs against the euro and to a 2023 high against the dollar ahead of the Norges Bank policy meeting later this week.

CHINA DATA MISSES

Talks between U.S. and Chinese officials on their strained trade ties and China's divestment from short-video app TikTok on Monday entered a second day in Madrid.

Data released on Monday showed the Chinese economy lost some momentum in August, with a slew of activity indicators - from industrial output to retail sales - coming below forecasts. Falls in property investment deepened, while home prices declined another 0.3% in August, extending a downward trend that has persisted since early 2023.

"Given the slowdown of the past few months, we expect that there's a strong case for additional short-term stimulus efforts," said Lynn Song, ING's chief economist, Greater China.

"We continue to see a high possibility for another 10bp rate cut and 50bp reserve-requirement-ratio cut in the coming weeks."

Separately, China's market regulator said on Monday that a preliminary investigation had found that Nvidia had violated the country's anti-monopoly law, marking the latest hit for the U.S. chip giant. The company's shares fell around 2% in premarket trading.

In commodities, oil prices pared earlier gains, leaving Brent crude roughly unchanged on the day at $67 a barrel, backing down after a rally on the back of Ukrainian drone attacks on Russian refineries.

Gold, meanwhile, held steady at $3,640 an ounce, just below last week's all-time high of $3,673.95.