Asian stock markets ended with gains last week as the speculation of further stimulus measures from the major central banks offered support. However, markets pared gains after policy makers in the U.S. and Europe failed to offer any new stimulus measures needed to bolster growth. The lack of concrete new action by the European Central Bank particularly weighed on the sentiment.

Markets are expected to begin the week on upswing gains as better-than-expected U.S. non-farm payroll data eased fears that the strength of economic recovery in the world's largest economy was losing steam. The U.S. Labor Department reported that 160,000 jobs were added in July, far better than the economists' estimate of 95,000 to 100,000 jobs. However, unemployment rose to 8.3 percent as more Americans gave up trying to find job.

The market disappointment over the failure of central banks to announce immediate measures is expected to be short-lived as ECB's strong tone over recent days and its President Mario Draghi's comments at a press conference in Frankfurt suggest that the central bank will prepare something in coordination with governments in the coming weeks to boost the faltering euro zone economy.

"The PBOC sounded more dovish in its last quarterly report released on 2 August, opening the door to more pre-emptive actions if necessary. Even the Fed could well act in September. The market knows that central banks are waiting around the corner, and this should cap the market correction that could take place in the week ahead," said a note from Credit Agricole.

On the data front, economic releases for both the U.S. and the euro zone are reasonably light. Reports on trade balance and productivity data from the U.S. are unlikely to be strong market-movers. So market participants are likely to focus on Asia where heavy data is due for release during the week. The main focus will be on China as the world's second largest economy is due to release its monthly data pack in the back half of next week and investors are looking for signs of improvement after the recent pro-growth measures.

However, analysts at Credit Agricole said the sequential rebound is unlikely and the headline data should continue to soften. Reports on monthly retail sales, fixed asset investment, exports and imports are expected to show slowdown on annual basis and will come in below consensus.

Industrial production is expected to show a slight pick-up on both sequential and annual basis while producer price index will decline to 2.8 percent on annual basis due to weaker energy and metal prices and softer demand in first-half. Meanwhile, CPI inflation for the month of July is expected to soften to 1.7 percent on weaker food prices while M2 money supply growth should jump and beat expectations.

In Japan, the seasonal merchandise trade deficit for the month of June is expected to be narrowed to 300.8 billion yen compared to 613.8 billion yen in May. June machinery orders are expected to increase by 6 percent on a monthly basis after plunging 14.8 percent in the previous month.

Reports on industrial production from India and Malaysia and exports data from Taiwan and Malaysia are likely to confirm the economic slowdown.