July 1 (Reuters) - A look at the day ahead in Asian

markets.

Asian market trading on Monday kicks off the new week, quarter

and second half of the year with investors' focus locked on a

data-heavy economic calendar, especially the latest snapshot of

Chinese factory activity.

The Caixin manufacturing purchasing managers index report

for June will go a long way to showing whether the recovery in

the world's second largest economy is gathering momentum,

struggling, or going into reverse.

China bulls will be hoping it's the former. Some indicators

in the first half of the year pointed in that direction, but the

overall picture was pretty bleak - growth is patchy, deflation

risks persist, stocks and the exchange rate are under heavy

pressure, and more stimulus is needed.

A Reuters poll of economists expect the 'unofficial'

manufacturing PMI index to fall back to 51.2 from 51.7 in May.

That would show continued expansion in activity - anything above

50.0 indicates growth - but at a slower pace.

The 'official' manufacturing PMI from China's National

Bureau of Statistics on Sunday came in at 49.5, unchanged from

May and marking the second month in a row that manufacturing

activity has declined.

The wider picture is perhaps even bleaker - the services PMI

sank to 50.2, a five-month low, and the construction PMI slipped

to 52.3, the weakest reading since July last year. Both indicate

growth, but it is clearly slowing.

Manufacturing PMIs from several other countries across Asia

will be released on Monday, including Japan, India, South Korea

and Australia.

If there are financial market ripples from the first round

of voting in the French election, they may be felt first in Asia

on Monday. The far-right eurosceptic National Rally party won

the first round, exit polls showed, but the final result will

depend on days of horsetrading before next week's run-off.

The broader macro and market backdrop to the start of the

week is reasonably strong. World stocks hit a record high last

week and ended the quarter up 2.4%, the sixth quarterly rise

from the last seven. Asian stocks jumped 5.5% in Q2.

Inflation figures from the U.S. on Friday were in line with

fairly benign expectations, enough to keep the 'soft landing'

narrative on track and maintain the prospect of two

quarter-point rate cuts from the Fed this year.

Could the first of these come before the November

presidential election?

But there are signs that the bullish momentum is losing

steam, especially in Big Tech, and across markets pockets of

uncertainty and volatility are appearing. In currencies, this is

playing out most obviously in the Japanese yen, which slumped to

a 38-year low against the dollar last week.

Here are key developments that could provide more direction

to markets on Monday:

- Manufacturing PMIs from across Asia, including China

(June)

- Indonesia inflation (June)

- Australia retail sales (May)