By Sarah White

MADRID (Reuters) – Markets will be watching for China’s next move as signs of a slowdown in the world’s second-largest economy stack up, raising expectations it will act to stoke growth.

A looming snap election in Greece and a closely watched conference hosted by the Federal Reserve in the United States are also likely to keep investors on their toes next week, in particular as they look for hints on when the U.S. will raise interest rates.

Fears that Chinese growth is weakening, dragging down the global economy with it, are already hammering commodities and world stock markets.

Both tumbled on Friday after a survey showed Chinese manufacturing slowed the most since the global financial crisis in 2009 – adding to other worrying clues about the country’s health, including its falling exports.

China devalued the yuan earlier in August, by pushing its official guidance rate down 2 percent. The central bank has said there was no reason for the currency to fall further, but investors are also bracing for further interest rate cuts.

“It will be all eyes on the Chinese authorities for any further policy support steps, alongside the People’s Bank of China yuan fixings and trading swings,” analysts at Investec Economics said in a note to clients.

China is also widely expected to relax reserve requirements ratios for its banks again in the coming months, a measure intended to spur lending by reducing the cash they need to hold. It is trying to keep its economy on course to grow 7 percent in 2015 – its slowest pace in a quarter of a century.

“We continue to expect a total of 100 basis points of reserve requirement ratio cuts by end-2015, with the first cut likely to take place within the next two weeks,” economists at Standard Chartered said.

The cash reserves ratio has already been cut three times this year.

EYES ON FED, GREECE

By the end of next week attention may shift away to the Rocky Mountains, where policymakers are due to gather from Aug. 27-29 for the Fed’s conference of central bankers, finance ministers, academics and financial market participants in Jackson Hole.

Fed chair Janet Yellen is not expected to attend, raising the prospect that other Fed officials may be more tight-lipped about the likelihood of the first rate increase in almost a decade, some analysts said.

The prospect of an increase as soon as September receded this week as the Fed released minutes of July meeting. They gave no clear signals as to the timing of such a move – which would affect markets across the world and could cause more pain for emerging market assets, already being hit by China’s woes.

Fed policymakers are still concerned about the weakness of the global economy, the minutes showed, but they were also more confident about US growth prospects.

Further clues on both matters should be gleaned from data releases this week, including second-quarter gross domestic product figures for the United States, due on Thursday.

Quarter-on-quarter GDP growth in the period is expected to be revised upwards to 3.2 percent from 2.3 percent, according to a Reuters poll.

In the euro zone, investors will also be looking at an German economic sentiment survey due on Tuesday for a better idea of the scope of the bloc’s recovery.

Preliminary August consumer price readings for Germany and Spain on Friday will provide further insight into how effective the European Central Bank’s bond-buying efforts have been at warding off deflation.

But the spotlight will mainly fall once again on Greece, where Prime Minister Alexis Tsipras has resigned. That opened the way for early elections after he secured much-needed funds from the country’s third international bailout program.

The current Greek government aims to strengthen its position in the election after accepting a rescue deal it once opposed. But that creates more uncertainty for markets already on edge over whether Greece will deliver on promised reforms and get its economy and banks back on track.

(Additional reporting by Koh Gui King in Beijing, editing by Larry King)