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Oil dips after initial rise, Brent at $73.3 a barrel

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China retail data beat forecasts, factory output in line

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Asia, European shares and U.S. futures nudge up

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Busy central bank week ahead, eyes on Middle East

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Dollar steadies, gold dips

(Updates ahead of Wall Street open)

By Wayne Cole and Alun John

SYDNEY/LONDON, June 16 (Reuters) - World shares nudged

up on Monday, helped by oil walking back some of last week's

increase, though the conflict between Israel and Iran remained a

concern, adding further uncertainty to a week packed with

central bank meetings.

The escalation in the Middle East came just as Group of

Seven leaders were gathering in Canada, with U.S. President

Donald Trump's tariffs already straining ties.

Iranian missiles struck Israel's Tel Aviv and the port city

of Haifa on Monday, killing at least eight people and destroying

homes, prompting Israel's defence minister to warn that Tehran

residents would "pay the price and soon".

Yet there was no sign of panic among investors as currency

markets stayed calm and Wall Street stock futures firmed after

an early dip.

S&P 500 futures rose 0.6%, and Brent was last off

just over 1% at $73.38 a barrel,, which analysts

attributed to the fact the weekend strikes did not affect

production and export facilities.

But last week's 13% surge means its inflationary impact, if

sustained, could make the Federal Reserve more nervous about

giving too many hints at its Wednesday meeting about interest

rate cuts later in the year.

Markets are still wagering on two cuts by December, with a

first move in September seen as most likely.

"The key is how much flexibility the Fed thinks it has.

We've been pleasantly surprised we've not yet seen inflationary

pass-through from the tariffs," said Ben Laidler, head of equity

strategy at Bradesco BBI.

"The situation in the Middle East is the major issue of the

day. The message from the market is that it isn't too afraid,

but it does turn what was already going to be a busy week into a

frenetic one, and that has a lot of people on the sidelines."

Data on U.S. retail sales on Tuesday may show a pullback in

autos dragging the headline number down even as core sales edge

higher. A market holiday on Thursday means weekly jobless claims

figures are out on Wednesday.

For now, investors were waiting for this week's developments

and MSCI's all-country world share index gained 0.2%, to sit a

touch below last week's record high.

Europe's STOXX 600 rose 0.4%, led by a rebound in

travel stocks after they suffered a large fall on Friday,

and Gulf stocks also recovered.

Earlier in the day, Chinese blue chips added 0.5%,

and Hong Kong gained 0.7% as data showed Chinese retail

sales rose 6.4% in May to handily top forecasts, while

industrial output was in line with expectations.

EXPOSED TO OIL

In currency markets, the dollar gave back some of last

Friday's gains against European currencies - the euro was up

0.2% at $1.1571 - and held steady against the Japanese

yen at 144.16.

The spike in oil prices is marginally negative for the yen

and euro as both Japan and the EU are major importers of energy,

while the United States is an exporter.

Currencies from oil exporters Norway and Canada both

benefited, with the Norwegian crown hitting its highest

since early 2023, before steadying.

"We should expect that economies with a positive energy

trade balance should see their currencies benefiting from the

shock to oil prices," noted analysts at Deutsche Bank.

"It's notable the dollar is in this category, highlighting

how the U.S. has moved from a net energy-importer to a net

exporter in recent years."

Central banks in Norway and Sweden meet this week, with the

latter expected to trim rates.

The Swiss National Bank meets on Thursday and is considered

certain to cut by at least a quarter point to take rates to

zero, with some chance it may go negative given the strength of

the Swiss franc.

The Bank of Japan holds a policy meeting on Tuesday and is

widely expected to hold rates at 0.5%, while leaving open the

possibility of tightening later in the year.

There is also speculation it could consider slowing the

rundown of its government bond holdings from next fiscal year.

Government bond yields nudged higher around the world. The

U.S. 10-year Treasury yield was last up 3 basis points at 4.45%

Germany's 10-year Bund yield was up 2 bps at 2.56%.

The calmer mood across markets saw some of gold's safe-haven

bid reverse and it was down 0.55% at $3,413 an ounce..