HONG KONG, Oct 3, 2022 (BSS/AFP) - Stocks drifted in Asia on Monday as

investors await key US jobs data, while girding themselves for a corporate
earnings season many fear will highlight the impact of surging inflation and
interest rates.

A report showing prices rose in the eurozone at a record pace last month
added concerns that central bank tightening has a long way to go, while
Federal Reserve vice chair Lael Brainard said US officials would not pull
back too early.

Banks' battle against inflation could also be made harder as OPEC and other
oil producers consider a major output cut owing to a plunge in prices caused
by demand worries. Crude prices jumped more than three percent in Asian trade
ahead of the possible cut.

Traders are also keeping an eye on developments in Britain as the ruling
Conservatives hold their annual conference a week after new finance minister
Kwasi Kwarteng shocked markets with a massive borrowing-dependent, tax-
cutting mini budget.

All three main indexes on Wall Street ended down again Friday, registering a
third straight quarter of losses for the first time since the global
financial crisis in 2009.

The release of US jobs data on Friday will be closely watched, with a strong
reading likely to give the Fed more ammunition to unveil a fourth successive
bumper rate hike at its November meeting.

Asian markets fluctuated at the start of the week.

Hong Kong dipped along with Sydney, Singapore, Taipei, Jakarta and
Wellington.

Tokyo rose, however, even as the Bank of Japan's Tankan survey showed
confidence fell among the country's largest manufacturers for the third
straight quarter. Manila also rose.

With inflation remaining elevated, there is little prospect that the pain
will ease any time soon.

On Friday, Brainard said: "Monetary policy will need to be restrictive for
some time to have confidence that inflation is moving back to target.

"For these reasons, we are committed to avoiding pulling back prematurely."

The comments were in line with other Fed officials, who have indicated
borrowing costs were unlikely to be lowered until late 2023 or 2024.

"Last week's developments reinforced our expectation that we will see further
tightening in financial conditions, but also illustrated the short-term two-
way volatility, which will likely accompany it," Citigroup's Ebrahim Rahbari
said.

At a time of rising real rates, volatility and the strong dollar "we
therefore remain very bearish regarding the outlook for global risk assets",
he added.

Markets are now bracing for company earnings reports, with traders keeping a
close eye on their forecasts in light of the uncertain rate environment.

Saxo Capital Markets analysts said in a note that there was a risk-off mood
"as corporate earnings misses continue to raise the threat of an ugly
earnings season ahead".

Both the US benchmark West Texas Intermediate crude and Brent climbed 3.3
percent, as major producers discussed a one million barrel per day cut in
output to support prices in the face of falling demand.

The reduction would be the biggest since the pandemic began, when crude
prices collapsed, and would help staunch a plunge in the oil markets over
recent months.

But OANDA's Edward Moya said: "The slide in oil prices is likely over.

"Energy traders turned pessimistic over the summer given global slowdown
fears, but now it seems the risks for oil are to the upside."

And Suvro Sarkar, an energy analyst at DBS Bank, added: "It's only going to
be a matter of time before oil returns to $100 a barrel, especially with
supplies set to tighten toward the end of the year," he said.

- Key figures around 0320 GMT -

Tokyo - Nikkei 225: UP 0.7 percent at 26,111.54 (break)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 17,060.92

Shanghai - Composite: Closed for a holiday

Pound/dollar: DOWN at $1.1128 from $1.1156 on Friday

Euro/dollar: UP at $0.9813 from $0.9802

Euro/pound: UP at 88.18 pence from 87.82 pence

Dollar/yen: UP at 144.81 yen from 144.80 yen

West Texas Intermediate: UP 3.3 percent to $82.12 per barrel

Brent North Sea crude: UP 3.3 percent to $87.94 per barrel

New York - Dow: DOWN 1.7 percent at 28,725.51 (close)

London - FTSE 100: UP 0.2 percent at 6,893.81 (close)

-- Bloomberg News contributed to this story -