(Bloomberg) — The dollar weakened and bonds rose as traders prepared for the Federal Reserve to reduce interest rates, with the market divided on how big this week’s cut will be.

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Bloomberg’s dollar index slipped to the lowest in more than eight months, while expectations of a narrowing rate differential between the US and Japan boosted the yen. Treasuries extended their gains, with the yield on the policy-sensitive two-year note falling to the lowest since September 2022.

Stocks kicked off a crucial few days with muted moves, as S&P 500 futures kept to a narrow range. Apple Inc. dragged tech shares lower in the premarket as some analysis of iPhone 16 pre-orders suggested weaker demand. There was little reaction in markets to the news of a second assassination attempt on former President Donald Trump.

The start of a long-anticipated US easing cycle takes center stage this week, part of a 36-hour monetary roller coaster that includes policy decisions in Brazil, South Africa the UK and Japan. It’s come down to a virtual coin toss for traders on whether the Fed will go for a 25 or 50 basis-point cut.

“There has rarely been so much uncertainty over central bank intentions,” analysts at Edmond de Rothschild wrote in a note. “They are caught between signs of economic weakness and inflation which is stubbornly resisting a return to the 2% target.”

For Joyce Chang, chair of global research at JPMorgan, the Fed has scope to make the bigger move and doing more now would probably send the right signal.

“We are still sticking with a 50 basis-point call, but it is a debate, internally and within the broader market,” Chang said on Bloomberg TV. “When I talk to investors, 25 versus 50 isn’t so much the debate, but really how does the US growth story look.”

That view was echoed by top Wall Street strategists, who suggested that the health of the US economy could have more bearing on stocks than the size of the Fed’s rate cut.

“If the labor data weaken from here, markets can trade with a risk-off tone regardless of whether the Fed’s first move is 25 or 50 basis points,” Morgan Stanley’s Mike Wilson wrote in a note. On the other hand, if jobs were to strengthen, a series of 25 basis-point reductions into mid-2025 could prop up equity valuations further, he said.

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Forecasters at Goldman Sachs Group Inc. and JPMorgan Chase & Co. also warned that rates alone were less important for stocks, given the uncertain outlook for the economy.

The Bank of Japan, meanwhile, is expected to keep rates on hold after roiling global financial markets with an increase at its last meeting.

“The communication from the BOJ will be critical to let market participants know exactly, as clear as they can be, what the next move and the particular timings of the next moves will be,” Katrina Ell, director of economic research Moody’s Analytics, told Bloomberg Television.

Trump is safe after his Secret Service detail opened fire at a man who was wielding an assault rifle at his West Palm Beach, Florida, golf course Sunday, in what the Federal Bureau of Investigation called an apparent assassination attempt.

According to law enforcement officials, Secret Service officers clearing the golf course ahead of Trump spotted a man in the woods with a gun. The suspect — later identified as 58-year-old Ryan Routh, according to federal officials who requested anonymity to discuss an ongoing investigation — fled in a black car but was later detained after a chase.

In Asia, a string of poor Chinese data left traders wondering if authorities would initiate forceful stimulus to buttress the economy. Factory output, consumption and investment all slowed more than forecast for August, while the jobless rate unexpectedly hit a six-month high.

Markets in Japan, South Korea and mainland China were closed for a holiday.

In commodities, gold rose to a fresh record high as markets waited for the Fed easing. Elsewhere, oil steadied after its first weekly gain in a month as a drop in Libyan exports was offset by China’s economic woes.

Key events this week:

• ECB speakers including Vice President Luis de Guindos and chief economist Philip Lane, Monday

• US empire manufacturing, Monday

• Singapore trade, Tuesday

• Federal Reserve begins two-day meeting, Tuesday

• US business inventories, industrial production, retail sales, Tuesday

• Canada CPI, Tuesday

• Indonesia rate decision, Wednesday

• South Africa retail sales, CPI, Wednesday

• UK CPI, Wednesday

• Eurozone CPI, Wednesday

• US rate decision, Wednesday

• Brazil rate decision, Wednesday

• Australia unemployment, Thursday

• New Zealand GDP, Thursday

• Taiwan rate decision, Thursday

• Norway rate decision, Thursday

• UK rate decision, Thursday

• South Africa rate decision, Thursday

• China loan prime rates, Friday

• Japan CPI, interest rate decision, Friday

• ECB President Christine Lagarde speaks, Friday

• Bank of Canada Governor Tiff Macklem speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 7:34 a.m. New York time

• Nasdaq 100 futures fell 0.4%

• Futures on the Dow Jones Industrial Average rose 0.2%

• The Stoxx Europe 600 was little changed

• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%

• The euro rose 0.4% to $1.1122

• The British pound rose 0.6% to $1.3197

• The Japanese yen rose 0.5% to 140.09 per dollar

Cryptocurrencies

• Bitcoin fell 1.8% to $58,740.14

• Ether fell 2.4% to $2,306.92

Bonds

• The yield on 10-year Treasuries was little changed at 3.64%

• Germany’s 10-year yield was little changed at 2.14%

• Britain’s 10-year yield was little changed at 3.77%

Commodities

• West Texas Intermediate crude rose 1% to $69.36 a barrel

• Spot gold rose 0.1% to $2,581.42 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess, Sujata Rao, Catherine Bosley and Sagarika Jaisinghani.

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