GLOBAL MARKETS-European stocks mixed ahead of more U.S. inflation data

By Elizabeth Howcroft

PARIS, July 16 (Reuters) - European stocks were mixed on Wednesday after U.S. data in the previous session suggested tariffs were causing inflation, prompting investors to scale back their rate-cut bets, while tariff-related uncertainty kept investors cautious.

Wall Street markets fell late on Tuesday and U.S. Treasury yields rose after U.S. consumer price data for June pointed to higher costs for some goods.

U.S. tariff threats were also weighing on market sentiment after President Donald Trump on Tuesday said letters notifying smaller countries of their U.S. tariff rates would go out soon. Trump threatened on Saturday to impose a 30% tariff on imports from Mexico and the European Union starting on August 1.

At 0835 GMT, the MSCI World Equity index was down 0.1% on the day .MIWD00000PUS, having been knocked off a record-high in the previous session after the inflation data.

The pan-European STOXX 600 was down 0.2% .STOXX while London's FTSE 100 was up by 0.1% .FTSE.

Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year. The pound rose slightly against the dollar after the data.

Traders will be monitoring U.S. producer price data, due later on Wednesday, to see the extent of the inflationary pressures.

“So far we have yet to see a decisive and meaningful pass-through from tariffs into the inflation readings," said Vas Gkionakis, senior economist and strategist at Aviva Investors.

"It is likely to come but we’ll just have to wait and see the timing and the extent."

The Fed has been keeping interest rates steady as it has waited for indications of the inflationary impact from tariffs, which Chair Jerome Powell had said he expected in the summer. Traders are betting that the Fed will start cutting rates in September IRPR.

Trump has repeatedly railed against Powell for not cutting interest rates sooner, prompting investor concern about whether the central bank's independence could be eroded.

The U.S. dollar, which had hit multi-week highs after Tuesday's data, cooled back down on Wednesday, with the dollar index at 98.538, little changed on the day overall =USD.

The euro was up 0.2% at $1.1620 EUR=EBS.

The benchmark 10-year German Bund yield was little changed at 2.71% DE10YT=RR and the 10-year U.S. Treasury yield was at 4.4833% US10YT=RR, retreating from the previous session's highs.

Investors are also paying attention to earnings data. Bank earnings due on Wednesday include Goldman Sachs GS.N, Morgan Stanley MS.N and Bank of America BAC.N.

Oil prices rose, supported by expectations of summer demand from the United States and China.

Gold also rose, up by 0.5% on the day at $3,339.70 an ounce XAU=.