By Nell Mackenzie

LONDON (Reuters) -Wall Street looked set to open higher while world equities dithered at four-week lows on Monday, as the question of U.S. and global growth divided traders internationally.

MSCI’s gauge of stocks around the globe fell 1.94 points, or 0.24%, to its lowest level in almost a month, while S&P rose 0.8% and Nasdaq futures climbed 0.9%.

European stock markets gained roughly 0.7% with all regional bourses up around the same amount, except for the CAC 40 up 0.8%.

Centre stage this week in Europe will be Thursday’s European Central Bank rate decision. The ECB, which cut rates by 25 basis points in June, is widely expected to ease policy by the same amount.

But the main focus for markets in these next few weeks will be the health of the U.S. economy, said Victor Balfour, investment strategist at Rothschild & Co. in a phone call with Reuters.

“The economic picture is not that soft yet, even with some data indicating a cooling of activity, it’s not a collapse,” said Balfour.

Fed fund futures dipped as investors wondered whether the mixed U.S. August payrolls report would be enough to tip the Federal Reserve into cutting rates by an outsized 50 bps when it meets next week.

So far, markets imply around a 30% chance of a large cut, in part due to comments from Fed Governor Christopher Waller and New York Fed President John Williams on Friday, though Waller did leave open the option of aggressive easing.

“Our read of the data is that the labour market continues to cool, but we see no sign of the kind of rapid deterioration in conditions that would call for a 50 bps rate cut,” Barclays economist Christian Keller said.

“Importantly, we also see no indication of any appetite for this in Fed communications,” he added.

Investors are pricing in 113 bps of easing by year-end and another 132 bps for 2025.

Data on August U.S. consumer prices on Wednesday should underline the case for a cut, if not the size, with headline inflation seen slowing to 2.6% from 2.9%.

Tuesday will see Democrat Kamala Harris and Republican Donald Trump debate for the first time ahead of the presidential election on Nov. 5.

YIELDS BOUNCE BACK

Euro zone and U.S. government bond yields rose after falling for much of last week.

There was a modest underperformance of French bonds after French newspaper La Tribune de Dimanche reported that the French finance ministry had requested an extension to the deadline for submitting its 2025 budget to the EU beyond Sept. 20.

Both U.S. 10-year and two-year Treasury yields rose 4 bps to 3.75% and 3.69%, moving away from last week’s 15-month lows.

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The yen also gave up some of its gains as the dollar jumped over 1% to 143.62 yen. The euro dipped 0.4% to $1.1043, having briefly been as high as $1.1155 on Friday. [USD/]

Data on Monday showed China inflation growing at the fastest pace in half a year. However, producer price deflation worsened, reflecting the underlying trend of a struggling economy.

This sent China’s blue-chip index down 1.2% to its lowest level since early February. Japan’s Nikkei fell roughly 0.5% as tech stocks declined. [.T]

Oil prices found some support as a potential hurricane system approached the U.S. Gulf Coast. Oil prices tumbled almost 10% last week in their biggest weekly fall in 11 months amid persistent concerns about global demand. [O/R]

Brent rose 55 cents to $71.61 a barrel, while U.S. crude climbed 58 cents to $68.25 per barrel.

(Reporting by Nell Mackenzie and Wayne Cole; Editing by Muralikumar Anantharaman, Mark Potter and Christina Fincher)