*

Europe, U.S. stocks slightly higher, world index near

record top

*

Dollar, bonds await US CPI report to refine rate cut

chances

*

Oil slips ahead of Trump/Putin meeting on Ukraine

*

Gold down around 1%, traders grapple with tariff

uncertainty

(Updates after early European trading)

By Wayne Cole and Alun John

SYDNEY/LONDON, Aug 11 (Reuters) - Major share indexes

around the world crept higher on Monday continuing to grind back

towards their late July peaks, with the focus of the week on a

crucial report on U.S. inflation that will likely set the course

of the dollar and bonds.

Europe's STOXX 600 share index rose 0.3%, with

Asia-Pacific stocks up 0.2% and S&P 500 futures

also 0.2% higher.

MSCI's world share index is now just

0.2% from its all-time high hit in late July as a strong

earnings season in the United States, and a mildly positive one

in Europe, support overall sentiment, helping investors to shrug

off the impact of soft U.S. July jobs data.

Trade and geopolitics loom large this week. A U.S. tariff

deadline on China, due to expire on Tuesday, is expected to be

extended again, while U.S. President Donald Trump and Russian

leader Vladimir Putin are due to meet in Alaska on Friday to

discuss ending the Ukraine war.

The main economic release will be U.S. consumer prices

on Tuesday, with analysts expecting the impact of tariffs to

help nudge the core up 0.3% to an annual pace of 3.0% and away

from the Federal Reserve target of 2%.

An upside surprise would challenge market wagers for a

September rate cut, though analysts assume it would have to be a

very high number given that a downward turn in payrolls is now

dominating the outlook.

It also comes at a complicated time for the Fed, with Trump

having repeatedly criticised policymakers for not cutting rates

at recent meetings, and with the focus on who will succeed

current chair Jerome Powell, whose term ends in May.

This, said Paul Mackel, Global Head of FX Research at

HSBC ( HSBC ), means that the dollar's reaction to the CPI data will not

be straightforward.

If the figure indicates higher U.S. tariff price

pressures, "that could support the stagflation narrative, and to

the dollar's detriment", he said, adding this would also go

against the view of some policymakers that tariffs are not

causing prices to increase.

"If, however, softer U.S. CPI readings materialise,

including the core goods figures, this would likely challenge

the dollar too by supporting the case for further Fed easing,

and perhaps see greater criticism from the U.S. administration

towards Fed Chair Powell."

Markets imply around a 90% probability of a September

easing, and at least one more cut by year-end.

That has helped support Treasuries, and the U.S. benchmark

10-year yield was last 4.25%, hovering near last week's low of

4.187%.

The prospect of lower borrowing costs has supported

equities, along with a run of strong earnings, particularly from

tech names.

Analysts were unsure what to make of reports, including by

Reuters, that Nvidia ( NVDA ) and AMD have agreed to

give the U.S. government 15% of their revenues from chip sales

in China, under an arrangement to obtain export licences for the

semiconductors.

CHINA EXPORTS DEFLATION

Chinese blue chips added 0.5% after data showed

consumer price inflation ticked up in July, but producer prices

kept falling as the country's massive manufacturing sector

exported deflation to the rest of the world.

Figures on Chinese industrial output and retail sales for

July are due on Friday, and forecasts are for a slight slowdown

after a jump in the previous month.

Currencies were quiet, with early trading thinned by a

holiday in Japan. The euro was marginally higher at $1.1651

and further away from a recent trough of $1.1392,

while the dollar dipped to 147.38 yen.

The Australian dollar eased to $0.6520 ahead of a

meeting of the Reserve Bank of Australia, which is widely

expected to back a rate cut. It stunned markets in July by

skipping an easing of policy to await more inflation data.

In commodity markets, gold fell 1.1% to $3,360 an ounce

after wild swings last week on reports that the U.S.

would slap 39% tariffs on some gold bars, which are major

exports of Switzerland.

The White House said on Sunday it planned to issue an

executive order clarifying the country's stance.

Oil prices slipped on the possibility that the scheduled

talks between Trump and Putin in Alaska on Friday could make

progress towards a ceasefire in Ukraine and potentially prompt

an eventual easing of sanctions on Russian oil exports.

Brent dropped 0.9% to $65.97 a barrel, while U.S.

crude eased 0.8% to $63.38.