* Asia stocks ex-Japan up 0.8 pct, China on holiday
* Sterling touches 7-week low as PM sets Brexit timetable
* All eyes on Deutsche as DOJ payment talks drag on
By Wayne Cole
SYDNEY, Oct 3 Asian shares got the new quarter
off to a firm start on Monday and European bourses were expected
to follow, while sterling stumbled as Britain set a March
deadline to start divorce proceedings from the European Union.
Risk sentiment had benefited on Friday from reports Deutsche
Bank was negotiating a much smaller fine with the U.S.
Department of Justice, though the Wall Street Journal reported
on Sunday that the talks were still in flux.
Just a hint of a deal was enough to push MSCI's broadest
index of Asia-Pacific shares outside Japan 0.8
percent higher. The index climbed 8.8 percent in the third
quarter, its best performance since early 2012.
The Australian market added 0.75 percent, while
Japan's Nikkei put on 0.8 percent. In Europe,
spreadbetters predicted British and German stocks would also
Japanese data showed confidence at big manufacturers was
static in September amid a strong yen and sluggish demand at
home and overseas.
The mood was supported by a survey showing activity in
China's manufacturing sector expanded again in September, which
may indicate that recent positive momentum can be sustained.
The official Purchasing Managers' Index (PMI) stood at 50.4
in September, identical with the previous month's level. A
reading above 50.0 shows growth on a monthly basis.
Chinese markets are on holiday for the entire week.
Sterling shed half a U.S. cent after British Prime
Minister Theresa May said she would trigger the process for the
UK to leave the European Union by the end of March.
The pound was last quoted at $1.2936 having been
down as far as $1.2902 at one point, its lowest since
May on Sunday told the ruling Conservative party's annual
conference that she was determined to move on with the process
and win the "right deal".
Using Article 50 of the EU's Lisbon Treaty will give Britain
a two-year period to clinch one of the most complex deals in
Europe since World War Two.
Things were quieter elsewhere in the currency market, with
the dollar steady at 101.38 yen having wandered between
101.02 and 101.75 on Friday.
The euro was flat at $1.1232, after rebounding from a
nine-day low of $1.1153 on Friday, while the dollar index
was up 0.06 percent at 95.519.
WAITING ON DEUTSCHE DEAL
A rally in financial stocks led Wall Street to a firmer
close on Friday. The Dow rose 0.91 percent, while the S&P
500 added 0.8 percent and the Nasdaq 0.81
A media report late on Friday claimed Deutsche and the U.S.
Department of Justice (DOJ) were close to agreeing a settlement
of $5.4 billion, rather than the initially touted $14 billion.
That report has still not been confirmed.
Deutsche Bank AG's U.S.-listed shares jumped 14 percent
in reaction, but were still down 11.3 percent for the
month. Its Frankfurt-listed shares rose 6 percent.
Deutsche has significant trading relationships with all of
the world's largest finance houses and the International
Monetary Fund (IMF) has identified it as a bigger potential risk
to the wider financial system than any other global bank.
Oil ran into profit-taking on Monday after enjoying its
second straight monthly gain in September aided by OPEC's
planned output cuts. Brent crude settled up 4 percent for
September and U.S. West Texas Intermediate rose 8 percent.
On Monday, the December Brent contract was off 24
cents at $49.95 a barrel, while U.S. crude lost 33 cents
Copper steadied near eight-week highs after boasting
its biggest monthly gain in more than a year-and-a-half as
improving Chinese economic data brightened the outlook for
demand from the world's top consumer.
(Reporting by Wayne Cole; Editing by Simon Cameron-Moore)