* July US consumer prices seen up 0.1% after 0.4% drop in

June

* Markets show even chance of Fed rate hike at next month's

meeting

* Brent rises 0.7% to $89.49 a barrel, heading for sixth

straight daily gain

(Updates for European morning trading)

By Samuel Indyk and Rocky Swift

LONDON, Aug 12 (Reuters) - Global equity markets held steady

and oil prices inched higher after new attacks on shipping in

the Middle East dimmed expectations for an end to the Iran war,

as markets turned their attention to U.S. inflation data later

in the day.

The U.S. and Yemen's Iran-aligned Houthis reported separate

attacks on shipping, while both Iran and the U.S. have stepped

up their rhetoric in recent days. Iran's top security official,

Mohsen Rezaei, said on Tuesday that the vital Strait of Hormuz

shipping route will remain closed unless the U.S. accepts Iran's

conditions to end the war.

The war shows no signs of ending despite repeated claims

from U.S. President Donald Trump of an imminent deal,

threatening the global inflation and growth outlook as energy

prices remain elevated.

U.S. crude rose 0.8% to $83.89 a barrel and Brent

rose 0.7% to $89.49 per barrel, poised for a sixth

straight daily gain. Both benchmarks settled more than $1 higher

on Tuesday, marking their highest closes since July 31 and

extending gains after jumping about 5% on Monday.

"Our base case for a long time has been a gradual but messy

de-escalation," said Dorian Carrell, head of multi-asset income

at Schroders.

"We don't expect traffic (through the Strait of Hormuz) to

go to its full capacity. We think that puts a floor on the oil

price and maintains an energy-driven inflationary driver in

markets in the near- to medium-term."

In early European trade, the pan-region STOXX 600

was little changed. Major stock indexes in Frankfurt,

Paris and London were hovering close to the

unchanged mark.

In Asia, stocks rose 0.7%, led by a 3.7%

gain in South Korea's Kospi and an almost 1% rise in

Japan and Taiwan stocks as chipmakers rose

sharply.

U.S. stock futures, the S&P 500 e-minis, were up 0.1%,

while Nasdaq futures rose 0.4%, as upbeat results from AI cloud

company CoreWeave ( CRWV ) after the market gave the AI trade

another boost.

EYES ON CPI

Markets remained focused on U.S. consumer prices data later

in the session for signals of timing for a potential Federal

Reserve rate hike.

Wednesday's CPI data will not capture the most recent rise

in energy costs, but it could still prove instrumental in

setting expectations for the Fed's meeting next month, with

money markets showing an even chance of a hike.

Consumer prices are expected to edge up 0.1% in July after

falling 0.4% in June, according to a Reuters poll. Annual CPI

inflation is forecast to slow to 3.4% from 3.5% a month

earlier.

"The CPI projection is expected to come in reasonably soft

today which would tee up a hold before the midterms, all else

being equal," said Schroders' Carrell.

Fed Bank of Boston President Susan Collins said she would back a

September interest rate rise if inflation remains high, the

Financial Times reported.

Markets are increasingly pricing in an early rate hike in Japan,

putting pressure on the nation's shorter-dated bonds. The yield

on the 5-year Japanese government bond rose to

2.12%, a record high, while the 2-year yield

reached a 31-year peak of 1.645%.

Investors now price an almost 60% chance of a quarter-point hike

at the Bank of Japan's September meeting.

The yen weakened slightly to 159.35 per dollar,

remaining off last week's high of 155.20 after several suspected

rounds of intervention.

The dollar index, which measures the currency against

a basket of currencies, rose less than 0.1% to 99.86. The euro

and sterling were little changed.

Spot gold rose 1% to $4,409 an ounce, while spot

silver rose 2% to $66.04 an ounce.