Asian stocks fell earlier in the session as markets caught up with growth data from Monday showing the post-pandemic bounce in China's economy was over.

Deutsche Bank said it was lowering its forecast for China's economic growth this year, following similar moves on Monday by J.P.Morgan, Morgan Stanley and Citigroup.

At 1059 GMT, the MSCI World Equity index was little changed at 697.41, just below the 698.39 reached on Friday, which was the highest since April 2022.

European shares were mixed, with the STOXX 600 up 0.2 percent, London's FTSE 100 up 0.1 percent and Germany's DAX down 0.1 percent.

"China is super important to Europe," said Fiona Cincotta, senior markets analyst at City Index. "There are a lot of concerns about what weakness in China could mean for Germany and the German economy and I think we're seeing that being played on in the DAX, which is struggling to push higher."

Wall Street futures pointed to investors staying on the sidelines as they waited for US retail sales and industrial production figures later in the session, which could give indications about the Federal Reserve's policy outlook.

Nasdaq e-minis were down 0.1 percent, while S&P 500 e-minis were little changed.

Investors are also keeping an eye on quarterly company results this week. Some of the largest US banks, including JPMorgan Chase and Wells Fargo, said on Friday they got a profit boost from higher rates, pointing towards a resilient economy.

Bank of America said its profit rose in the second quarter, as it earned more from customers' loan payments. Goldman Sachs earnings are due on Wednesday.

The Fed, European Central Bank and Bank of Japan hold policy meetings next week.

"Any sense that the Federal Reserve has reached peak interest rates or any sense that they're turning less hawkish or more dovish will be that injection that stocks need to take the next leg higher," Cincotta said.

Expectations that the Fed and ECB will diverge on rate hikes have caused the dollar to weaken recently.

Money markets have largely priced in a 25-basis-point rate hike from the Fed at its policy meeting later this month, though there are expectations that rates will come down as early as December.

Conversely, investors expect the ECB and the Bank of England to extend their rate-hike cycle.

The US dollar index was down 0.2 percent at 99.749, having reached its lowest since April 2022 on Friday.

The euro hit a fresh 17-month high of $1.1276 around 0732 GMT, before easing to trade up 0.2 percent on the day at $1.12495 EUR.

Euro zone government bond yields were down, with the German 10-year yield hitting its lowest since July 3 at 2.368 percent, down around 8 basis points on the day.

The yield on US 10-year notes was down around 3 bps on the day, at 3.7638 percent.

Oil prices were a touch higher, with Brent crude up 0.4 percent at $78.84 per barrel and US West Texas Intermediate crude at $74.53, up 0.51 percent.

Spot gold was up 0.39 percent at $1,962.29 an ounce.