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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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China retail data beat forecasts, factory output in line

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Nikkei gains, Wall St futures edge up ahead of Fed

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Oil rises again, but pares initial jump

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Dollar shade firmer, yen and euro weighed by oil

By Wayne Cole

SYDNEY, June 16 (Reuters) - Asian markets kept their

nerve on Monday and oil prices climbed anew as the conflict

between Israel and Iran showed no sign of cooling, adding

geopolitical uncertainty to the world's economic troubles in a

week packed with central bank meetings.

The escalation came just as Group of Seven leaders were

gathering in Canada with U.S. President Donald Trump's tariffs

already straining ties.

Yet there was no sign of panic among investors with currency

markets calm and Wall Street stock futures steadying after an

early dip.

Oil did add 1% to last week's 13% surge in an inflationary

pulse that, if sustained, should make the Federal Reserve even

less likely to cut interest rates when it meets on Wednesday.

Futures imply almost no chance of a reduction in the 4.25%

to 4.5% rate band, and scant prospect of a move in July either.

Markets will be particularly sensitive to any change in the

Fed's "dot plot" path for rates.

"The Committee will release a new set of economic forecasts,

and we expect that the interest rate forecast 'dots', which

last showed a median expectation of two cuts this year, will

instead look for only one cut this year," said Michael Feroli,

head of U.S. economics at JPMorgan.

Markets are still wagering on two easings by December, with

a first move in September seen as most likely.

Data on U.S. retail sales on Tuesday will also be a hurdle,

as a pullback in autos could drag the headline down even as core

sales edge higher. A market holiday in Thursday, means weekly

jobless claims figures are out on Wednesday.

For now, investors were waiting on developments and MSCI's

broadest index of Asia-Pacific shares outside Japan

edged up 0.1%.

Japan's Nikkei firmed 0.8% and South Korean stocks

added 0.5%.

Chinese blue chips added 0.1% as data showed

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

industrial output was in line with expectations.

S&P 500 futures rose 0.1% and Nasdaq futures

gained 0.2%, recovering from an early dip.

EXPOSED TO OIL

European markets were more pressured by the region's

reliance on oil imports and EUROSTOXX 50 futures

slipped 0.2%, while DAX futures lost 0.3%. FTSE futures

were little changed.

Yields on 10-year Treasuries were a shade

higher at 4.41%, showing little sign of safe haven demand.

In currency markets, the dollar firmed 0.2% on the Japanese

yen to 144.39, while the euro dipped 0.1% to $1.1530

. The spike in oil prices is a negative for the yen and

euro at the margin 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.

"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 thought likely 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.

In commodity markets, gold was getting the safe-haven bid

from Mid-East tensions and rose 0.5% to $3,450 an ounce.

Oil prices were underpinned by fears the Israeli-Iran

conflict could spread and disrupt exports from the region,

particularly through the vital Strait of Hormuz.

Brent climbed 72 cents to $74.95 a barrel, while

U.S. crude rose 84 cents to $73.82 per barrel.