Asian Stock Market: Caution stems ahead of US Retail Sales

• Asian market trades on a negative note amid the lack of top-tier regional economic data.
• Market participants remain cautious ahead of the US inflation data.
• The downbeat Chinese data fueled the concern about an economic slowdown.

Most Asian stock markets trade in negative territory on Tuesday. Markets turn cautious amid the concern about an economic slowdown in China and market participants await the US Retail Sales and Industrial Production for June. 

Japanese traders return from the holiday and NIKKEI posts modest gains of 0.23%. Meanwhile, Hong Kong's Hang Seng is down 1.85%, Shanghai Composite Index loses 0.06% and KOSPI Index down 0.5%.

It's worth noting that the Bank of Japan (BoJ) policymakers continue to maintain the easy-money policy, even though market participants expected and exited from ultra-low interest rates and moderated the Yield Curve Control (YCC) policy.

On the US-China headline, US Climate Envoy John Kerry informed China's top diplomat, Wang Yi, on Tuesday that "our hope is now that this could be the beginning of new cooperation to solve the differences between us." The market will keep an eye on the renewed tensions between the US-China that could weigh on the risk sentiment. 

Talking about the Chinese data, the concerns of an economic slowdown in China remain in focus. The National Bureau of Statistics (NBS) revealed that the Chinese Gross Domestic Product (GDP) came in at 6.3% annually, worse than expected at 7.3% and 4.5% prior. At the same time, Industrial Production YoY rose by 4.4% from 3.5% prior, above the consensus of 2.7%. 

Looking forward, the Japanese Trade Balance and the National Core CPI YoY will be released later this week. Also, investors will focus on the US Retail Sales for June, which is expected to rise by 0.5% from 0.3% the previous month. This data might influence the USD dynamic and hint at a sooner end to the rate hike cycle. This, in turn, underpins riskier assets like Gold, equities, AUDUSD, etc.