(Updates ahead of Wall Street open with U.S. PCE and GDP data.)

* Ceasefire strained as Iran claims Strait of Hormuz

closed

* Oil prices bounce after Wednesday's steep slide

* European shares dip after strongest day in 4 years

* US core price data comes in as forecast, but GDP misses

By Marc Jones and Wayne Cole

LONDON/SYDNEY, April 9 (Reuters) - Share markets sagged

on Thursday as cracks quickly began to appear in the fragile

Gulf truce, nudging oil prices back up toward $100 a barrel and

reminding investors the inflationary fallout would last a long

while yet.

Crucially, there was scant sign that the Strait of Hormuz was

open in any meaningful way, with Iran flexing its control over

the vital oil artery and demanding tolls for safe passage.

President Donald Trump took to social media to declare U.S.

forces would remain in the Gulf until a deal was reached and

complied with, otherwise the "'Shootin' Starts,' bigger, and

better, and stronger than anyone has ever seen before."

Meanwhile, Israel has carried out its heaviest strikes on

Lebanon since its conflict with the Iran-backed Hezbollah

militia began last month, killing more than 250 people on

Wednesday.

Brent crude futures rose almost 3.5% to $98 a

barrel, U.S. WTI futures bounced 4.6% to $98.88, Wall

Street futures were down and the pan-European STOXX 600

index was 0.5% lower having seen its biggest one-day

gain since 2022 on Wednesday when it leapt 3.7%.

UBP's Head of Investment Services UK Peter Kinsella said the

moves showed markets remained focused on headlines, although

apart from the big swings in oil prices, he said that volatility

in most of the main asset classes was still limited.

"It is very difficult for investors as they are dealing with

a conflict where the protagonists don't even know what they

want," Kinsella said.

SPLUTTERING GERMANY

Government bond yields - which drive the global cost of

borrowing - were also shifting higher again having plunged on

Wednesday.

German industrial production fell unexpectedly in February,

showing Europe's largest economy was subdued and on course for

another quarter of contraction even before the Iran war.

Overnight in Asia, Japan's Nikkei had ended 0.7%

lower after jumping 5.4% the previous session. South Korea

dipped 1.6%, following a leap of 6.8%.

Chinese blue chips also slipped 0.6%, while MSCI's

broadest index of Asia-Pacific shares outside Japan

eased 0.7%.

On Wall Street, S&P 500 futures and Nasdaq futures

were both off around 0.3% ahead of their restart later.

INFLATION IS INEVITABLE

With oil prices still around 40% higher than pre-conflict,

an inflationary spike is about to show up in the hard data

across the globe.

The PCE index of U.S. core prices for February published

ahead of the Wall Street open rose 2.8% on an annual basis and

3% excluding the volatile food and energy components. The index

is the Fed's preferred inflation gauge.

Both figures were in line with economists' forecasts

although a separate report showed the U.S. economy grew 0.5% in

the fourth quarter compared with estimated growth of 0.7%.

State Street's PriceStats' inflation metrics meanwhile show

March has seen the biggest month-on-month increase in prices

since at least 2008 when its data series began, according to its

head of Macro Strategy Michael Metcalfe.

Minutes from the Federal Reserve's last policy meeting on

Wednesday showed a growing number of members felt a rate hike

might be needed to contain inflation, though many hoped the next

move would still be a cut.

That tempered a rally in Treasuries, which proved modest

compared with the big gains seen in European debt markets

following the ceasefire announcement. Yields on U.S. 10-year

notes were at 4.296% in early U.S. trading, compared

to 3.96% before the attack on Iran.

Fed fund futures imply only 6 basis points of easing

for the rest of this year, having given up on 50 basis points of

cuts since the end of February. Europe's money markets though

still price in at least two ECB rate hikes this year.

"When you look at bond prices it's still very much

oil-driven," said Michiel Tukker, senior UK & euro zone rates

strategist at ING, adding that markets were struggling to price

the complexities of the situation, instead sticking to the

"where's oil?" playbook.

The shifting outlook for rates saw the dollar pare some of

its knee-jerk losses, leaving the dollar index drifting

around the 99 level and the euro at $1.1681 compared

to the previous day's top of $1.1721.

The dollar did inch back above 159 yen though,

having fallen as far as 157.89 at one stage on Wednesday.

UBP's Kinsella said he was still grappling with why Japan's

central bank hadn't intervened yet given the yen's persistent

weakness.

In commodity markets, gold inched back to $4,713 an ounce

after bouncing as high as $4,777 while European natural gas

prices rebounded to 45.65 euros per megawatt hour (MWh) although

the move was far more modest than in oil markets.