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Premarket: Signs in Asian data of economic headwinds

Employees assemble the Nissan Leaf electric vehicle at the Oppama plant in Yokosuka city, near Tokyo, on July 2, 2011. Nissan started factory operation on Saturday and Sunday this month as Japan Automobile manufacturers Association agreed to close their factories on Thursday and Friday for power saving due to the expected power shortage in the wake of the March 11 earthquake and nuclear disaster.

YOSHIKAZU TSUNO/YOSHIKAZU TSUNO/AFP/Getty Images

U.S. stock index futures slipped on Monday, putting the S&P on track for its third consecutive decline, after economic data in Asia indicated the global economy continues to slow.

S&P 500 futures fell 5.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 59 points, and Nasdaq 100 futures declined 7.75 points.

Japan's core machinery orders fell at a record pace of 14.8 per cent in May, far worse than the 3.3 per cent forecast, while inflation in China eased to a 29-month low of 2.2 per cent in June.

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Asian shares slid after cooling inflation in China exacerbated worries about flagging global economic growth, with investors not particularly hopeful that a European meeting later in the day would bring further progress for the region's banks.

The data comes on the heels of Friday's disappointing U.S. jobs report which showed non-farm payrolls grew by only 80,000 in June.

Adding to pressure, Spanish bond yields rose past the 7 per cent level viewed as unsustainable ahead of a meeting by euro zone finance ministers.

European equities were lower for a fourth straight session as the global economic data hit miners and a top German retailer offered fresh proof of the euro zone crisis impact on corporates ahead of the earnings season.

The euro steadied after hitting a two-year low against the dollar early on Monday, looking vulnerable to concerns that a meeting of finance ministers later will merely highlight the limitations of anti-crisis steps agreed last month.

The euro was worth $1.2543, up 0.34 of a cent.

But having lost more than 3 per cent against the dollar last week, the euro may have scope for a temporary rebound as traders take profit on hefty bearish positions.

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"The euro has moved a great distance in a short period and there is a risk of a bit of a correction. But unless it rises through $1.2410 (U.S.) it will still be worth selling into any rallies," said Jeremy Stretch, head of currency strategy at CIBC.

Alcoa Inc. will kick off a week of earnings after the closing bell with the aluminum giant expected to post a 5-cent per share profit for the second quarter. Investors will closely monitor corporate earnings for signs the euro zone debt crisis has damaged profits.

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