Investors' focus this week turns to Friday's U.S. nonfarm payrolls as markets try to gauge whether labor market conditions are strong enough for the U.S. Federal Reserve to tighten monetary policy. 

Fears the Fed would not hike interest rates sparked a sell-off two weeks ago that continued into last week, but things seemed to even out by Friday after Fed Chair Janet Yellen said an interest rate hike before year-end still was likely. Her statement eased concerns about slowing global growth and helped the U.S. dollar and risk assets, both hit hard by fears over China's faltering economy. 

U.S. stocks traded up Friday, but the Standard and Poor's 500 closed slightly lower amid a sell-off in biotech shares. The Nasdaq lost 1 percent while the Dow Jones Industrial Average managed a 0.7 percent uptick.

The S&P 500 is on track for its worst quarterly performance in five years. Reuters data estimate half of the S&P sectors will post lower profits because of falling oil prices, a strong U.S. dollar and weak global demand.

Asian equity markets started out mixed Monday. At the open, China reported industrial profits declined 8.8 percent year-on-year in August, the worst performance in at least four years. MSCI's broadest index of Asia-Pacific shares outside Japan stood flat while Tokyo's Nikkei lost 1.2 percent in early trade, Reuters reported. China's Shanghai index was off 0.45 percent.

Hong Kong, Taiwan and South Korea were shuttered for the Mid-Autumn Festival, CNBC reported.  

Still to come this week in Asia are China's official September purchasing managers' index (PMI) for the manufacturing sector and the final Caixin/Markit PMI. Both come out Thursday. In the U.S., investors are expected to be focused on consumer spending, weekly jobless claims and unemployment rate.

Analysts predict Volkswagen will continue to pay the price for its emissions scandal even before fines are levied. The European Central Bank stopped buying VW bonds, which are backed by car loans and were being purchased as part of the ECB's quantitative easing package, the Telegraph reported.

Private investors are also thought to be dropping out in fear for the company's financial health. The German automaker already is facing fines of as much as $18 billion after admitting it used software that reported misleading emissions data during testing as well as a series of class-action lawsuits filed by VW diesel vehicle owners who accuse the company of fraud.