The euro, oil and Asian shares fell on Monday, weighed down by uncertainty about Spain's bailout and concerns over slumping demand due to a slowdown in global growth, with data from Japan to China underscoring sluggish business activity.
Several Asian markets are closed for holidays on Monday, including China, Hong Kong and South Korea, keeping trade subdued.
The MSCI index of Asia-Pacific shares outside Japan fell 0.4 percent. The Australian market was barely changed in choppy trade, rising as much as 0.6 percent and falling as much as 0.3 percent. Taiwan stocks slid 0.7 percent, pausing after ending the third quarter up 5.7 percent.
Japan's Nikkei stock average fell 0.8 percent to a three-week low.
China's official factory purchasing managers' index, which tracks mainly big firms, rose to 49.8 in September from August's 49.2, which was the lowest since November 2011. The figure was in line with expectations and reflected how the world's second-biggest economy is struggling to regain strength against cooling exports as the global economy remain sluggish.
A private sector HSBC PMI earlier showed overall factory activity shrank for an 11th consecutive month in September, suggesting China's economy has almost certainly suffered a seventh straight quarter of slowing growth.
"The PMI came in below 50 again in September, suggesting a continued weakness in the economy and confirming our view that the policies implemented so far have failed to arrest a cyclical economic downturn," ANZ Bank said in a research note. "We expect the PBOC to cut the reserve requirement ratio by 50 bps soon."
Beijing approved about $150 billion worth of infrastructure projects last month. China cut interest rates twice in June and July and lowered banks' reserve requirement ratio three times since late 2011, but has refrained from cutting interest rates or RRR since July, though it has kept money markets liquid.
Elsewhere, Bank of Japan data showed sentiment among big Japanese manufacturers worsened in the third quarter from the previous quarter, hit by a steady deterioration in export demand as Europe's debt crisis simmers and China's economy slows.
Europe's debt crisis also took a toll on South Korean exports to the region, falling 5.1 percent in September from a year ago, while the HSBC Taiwan PMI for September fell at its fastest rate in 10 months as export orders slumped.
Euro zone and U.S. manufacturing surveys are due later on Monday but the key statistic this week is Friday's U.S. nonfarm payrolls, the first jobs data after the Fed's latest easing.DOLLAR DRIVES COMMODITIES LOWER
U.S. crude fell 0.9 percent to $91.36 a barrel and Brent fell 0.7 percent to $111.66.
The euro fell 0.4 percent to a three week low of $1.28035 while risk-sensitive currencies also fell, with the Australian dollar slipping 0.4 percent to $1.0328.
The safe-haven dollar was bid, lifting the dollar index, measured against a basket of key currencies, up 0.2 percent, weighing on spot gold which traded down 0.4 percent to $1,763.81 an ounce.
Gold is typically associated with safety but it is also perceived as an alternative currency and comes under pressure when the U.S. currency strengthens.
While copper and steel may get the brunt of growth worries in China, the world's leading consumer of base metals, oil and gold were likely to be underpinned over the long term by the recent round of monetary stimulus packages launched by the U.S. Federal Reserve, said Bob Takai, general manager of Sumitomo Corp's energy division.
"U.S. oil prices are weighed by lacklustre U.S. economic fundamentals and authorities probably don't want to see a spike in oil which puts a drag on the economy, but oil is also unlikely to slump thanks to ample liquidity provided by the Fed's quantitative easing," he said.
London copper fell 0.6 percent to $8,159 a tonne.
EYES ON EUROPE
An independent audit on Friday showed Spanish banks will need a total of 59.3 billion euros in extra capital to beef up their strength, which was within expectations and welcomed by the European Commission, the European Central Bank and the International Monetary Fund.
But uncertainty over when and whether Spain will seek external aid kept investors nervous. Markets were also waiting for a review by credit rating agency Moody's, which currently has Spain on one notch above junk with a negative outlook.
Greece, another source of market jitters, resumes talks with its international lenders this week for a bailout needed to avert bankruptcy and a possible euro zone exit. Two German magazines reported on Saturday Athens will receive the aid despite budget shortfalls and slow progress on reforms because the euro zone does not want the country to leave the euro.
"All of this suggests a range trading environment with a mild positive bias," Sebastien Galy, currency strategist at Societe Generale, said in a note.
A slew of central bank policy meetings this week will kick off with the Reserve Bank of Australia on Tuesday, followed by the ECB, the Bank of England and the BOJ, potentially deterring investors from making big bets.