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US futures slightly higher, world index near record top

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Dollar, bonds await US CPI report to refine rate cut

chances

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Oil steadies ahead of Trump/Putin meeting on Ukraine

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Gold down around 1%, traders grapple with tariff

uncertainty

(Updates prices)

By Wayne Cole and Alun John

SYDNEY/LONDON, Aug 11 (Reuters) - Stocks marked time on

Monday, holding just shy of peaks scaled in late July, as

investors awaited a crucial report on U.S. inflation that will

likely also set the course of the dollar and bonds.

Trade and geopolitics also loom large for investors 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.

S&P 500 futures were last up 0.16%, with Europe's STOXX 600

share index flat on the day after Asia-Pacific stocks

had gained 0.3%.

That leaves MSCI's world share index around

0.2% below 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.

The main economic release this week 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% 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 ),

meant that the dollar's reaction to the CPI data would not be

straightforward.

If the figure indicated 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 were 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 at 4.27%, down around 1 basis point and

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. Shares of both companies were marginally lower

in pre-market trading.

CHINA EXPORTS DEFLATION

Chinese blue chips added 0.4% 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 softer at $1.1627

while the dollar inched up to 147.87 yen.

The Australian dollar eased to $0.6510 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 1.3% to $3,354 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 has said it planned to issue an executive

order clarifying the country's stance.

Oil prices stabilised as investors looked ahead to the talks

between Trump and Putin in Alaska on Friday, with U.S. policy

towards Russian oil exports in focus.

Brent rose 0.6% to $66.99 a barrel, while U.S. crude

gained 0.5% to $64.20.