(Bloomberg) — Asian stocks fell as concern over France’s political crisis stoked anxiety in global markets, while traders awaited policy decisions from major central banks due this week.

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MSCI’s Asia Pacific Index fell the most in two weeks, as Japanese stocks led the decline. Hong Kong shares rebounded, led by financial and tech firms, after data that showed Chinese retail spending beat forecasts. Benchmark 10-year Treasuries slipped and US equity futures were little changed. Markets including Singapore, India and Indonesia are closed for holidays.

The flight to haven assets came as risk sentiment soured, with a gauge of global stocks falling the most in two weeks as France’s snap parliamentary election renewed investors’ focus on political volatility worldwide. The greenback inched higher. The euro steadied after falling the most in two months last week. French bond futures declined.

“The investor uncertainty over ballot boxes shows up again – with the last two weeks highlighting the risks of volatility despite expectations for governmental changes – start with South Africa, continue to Mexico and now throw in Europe with the surprise French election,” said Bob Savage, head of markets strategy and insights at BNY Mellon. “In the next month, fears are rising about snap election risks in Japan and Germany given the weak government support showing up in polling there.”

The PBOC kept its one-year MLF interest rate unchanged at 2.5%. Key economic data came mixed. While May retail sales beat analysts’ expectations, factory output was weaker than expected. Chinese property developers’ shares fell after home prices declined at a faster pace in May, as the country’s most forceful efforts to support the property market took time to revive demand.

Political Risks

A coalition of France’s left-wing parties presented a manifesto to pick apart most of Macron’s seven years of economic reforms and set the country on a collision course with the EU over fiscal policy. Far-right leader Marine Le Pen said she won’t try to push out President Emmanuel Macron if she wins France’s snap parliamentary election, in an appeal to moderates and investors.

Last week, the spread between French and German bonds widened the most on record.

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After the Federal Reserve pared back projections for US monetary easing this year, policymakers from the UK to Australia are likely to signal this week that they’re still not convinced enough about disinflation to start lowering borrowing costs themselves. Emerging market policy makers, including in Indonesia and Brazil, are also likely to push back on rate cut expectations.

Federal Reserve Bank of Minneapolis President Neel Kashkari over the weekend said the central bank can take its time and watch incoming data before starting to cut interest rates, echoing sentiment from Cleveland Fed President Loretta Mester — who still sees inflation risks as tilted to the upside.

US stocks struggled to gain traction Friday after a gauge of consumer sentiment sank to a seven-month low. The S&P 500 closed mildly lower, led by a drop in industrial shares. Tech outperformed, with Adobe Inc. up 15% on a strong outlook. The Stoxx Europe 600 slid 1%, while France’s CAC 40 Index extended losses to over 6% last week, the most since March 2022.

This week, traders will also be watching inflation readings in Europe and the UK to help finesse bets on the global monetary policy outlook. Meantime, a swath of Fed officials including Dallas Fed President Lorie Logan, Chicago Fed President Austan Goolsbee and Fed Governor Adriana Kugler are due to speak.

In commodities, oil slipped after its biggest weekly advance since early April.

Key events this week:

Philippines overseas remittances, Monday

Italy CPI, Monday

US Empire manufacturing, Monday

ECB Chief Economist Phillip Lane speaks, Monday

Philadelphia Fed President Patrick Harker speaks, Monday

Australia rate decision, Tuesday

Chile rate decision, Tuesday

Eurozone CPI, Tuesday

Singapore trade, Tuesday

US retail sales, business inventories, industrial production, cross-border investment, Tuesday

Richmond Fed President Thomas Barkin, Dallas Fed President Lorie Logan, Fed Governor Adriana Kugler, St. Louis Fed President Alberto Musalem, Chicago Fed President Austan Goolsbee, Tuesday

Japan trade, Wednesday

Bank of Japan issues minutes of April policy meeting, Wednesday

South Africa CPI, retail sales, Wednesday

UK CPI, Wednesday

Bank of Canada issues Summary of Deliberations, Wednesday

Brazil rate decision, Wednesday

New Zealand GDP, Thursday

China loan prime rates, Thursday

Indonesia rate decision, Thursday

Eurozone consumer confidence, Thursday

Norway rate decision, Thursday

Switzerland rate decision, Thursday