President Donald Trump will meet with the top Democratic and Republican leaders in Congress later on Monday to discuss extending government funding. Without a deal a shutdown would begin from Wednesday, which is also when new US tariffs on heavy trucks, pharmaceuticals and other items go into effect.

A protracted closure could leave the Federal Reserve flying blind on the economy when it meets on Oct. 29.

"If the shutdown lasts beyond the Fed meeting, the Fed will rely on private data for its policy decisions," analysts at BofA wrote in a note. "On the margin, we think this may lower the likelihood of an October cut, but only marginally."

Markets imply a 90 percent chance of a Fed cut in October, with around a 65 percent probability of another in December.

The BofA analysts estimated a shutdown would subtract only a slight 0.1 percentage point from economic growth for every week it lasted, while noting the impact on financial markets had been minimal in the past.

They cautioned that should the government use the closure to lay off workers permanently, then it could have a more meaningful impact on payrolls and consumer confidence.

There is also much uncertainty about what might happen at a meeting of US generals and admirals in Quantico, Virginia, on Tuesday, called by Defense Secretary Pete Hegseth, which Trump will reportedly attend.

Otherwise, analysts expected equities to be supported by buying for the new quarter, which historically tends to be a positive one for stocks. The S&P 500 has gained 74 percent of the time in fourth quarters.

S&P 500 futures were up 0.2 percent, while Nasdaq futures firmed 0.3 percent, having eased modestly last week. EUROSTOXX 50 futures added 0.3 percent, as did FTSE futures and DAX futures.

Japan's Nikkei slipped 0.8 percent, but was still 5 percent higher for September so far. Investors are waiting to see who will emerge as the new leader of the ruling LDP in a vote this weekend, with implications for fiscal and monetary policy.

South Korean stocks bounced 1.3 percent, bringing their gains for the month to 7.6 percent. MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.4 percent, to be up almost 4 percent for the month.

Chinese blue chips added 0.7 percent, ahead of the Golden Week holidays which begin on Wednesday.

In bond markets, 10-year Treasuries found support at 4.16 percent, having been pressured last week by a run of upbeat US economic data that led investors to pare back expectations for how low Fed rates might ultimately go.

A host of central bank speakers are on the diary this week, with at least five from both the Fed and the European Central Bank appearing on Monday alone.

Australia's central bank meets on Tuesday and is widely expected to hold rates at 3.65 percent, having already eased three times this year.

The dollar index slipped back 0.2 percent to 97.952, having benefited last week from the batch of better economic news. The euro nudged up to $1.1726, but was still in the lower half of its recent $1.1646 to $1.1918 range.

The dollar eased 0.4 percent to 148.92 yen, after rallying just over 1% last week and away from the September low around 145.50.

In commodity markets, gold resumed its climb to reach a fresh all-time high at $3,798 an ounce.

Oil prices slipped as crude started to flow through a pipeline from the semi-autonomous Kurdistan region in northern Iraq to Turkey for the first time in 2-1/2 years.

Reuters reported OPEC+ will likely approve another oil production increase of at least 137,000 barrels per day at its meeting next Sunday.

Brent dropped 0.8 percent to $69.73 a barrel, while US crude eased 0.7 percent to $65.27 per barrel.