Chinese blue chips were 0.2% lower after retail sales topped forecasts by increasing 3.7% in May, but industrial output and fixed-asset investment both underwhelmed

Asian share markets were in the red on Monday as mixed Chinese economic news underlined the country’s bumpy recovery, while political uncertainty in Europe dampened risk appetites and kept the euro on the defensive.

Chinese blue chips were 0.2% lower after retail sales topped forecasts by increasing 3.7% in May, but industrial output and fixed-asset investment both underwhelmed.

Other data showed home prices dropped at the fastest pace in a decade in May, highlighting the continued strains in the property sector.

The People’s Bank of China (PBOC) kept its one-year rate unchanged, dashing some speculation of a cut after surprisingly soft bank lending data.

China’s official Financial News on Monday reported there was still room to reduce rates, but there were internal and external constraints on policy.

That made for cautious trading, and MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.2%.

Japan’s Nikkei slid 1.9%, with investors now facing a six-week wait to hear details of the BoJ’s next tightening steps.

EUROSTOXX 50 futures rose 0.3% after last week’s steep declines, while FTSE futures added 0.4%.

S&P 500 futures were steady, while Nasdaq futures gained 0.1% following a string of record finishes.

Analysts at Goldman Sachs have raised their year-end target for the S&P 500 to 5,600, from 5,200 and the current 5,431.

Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates, the analysts stated in a note.

The main U.S. data of the week will be retail sales for May on Tuesday, where a 0.4% jump is expected after a 0.3% decline in April, while markets have a holiday on Wednesday.

At least 10 policymakers from the Fed are due to speak this week and are expected to address the market’s wagers for two rate cuts this year.

While the Federal Reserve itself sounded a hawkish note last week, a trio of soft inflation numbers led futures to price in a 76% probability of a cut as early as September and 50 bps of easing for the year.