* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asian share indices slip after two days of gains
* Trump holding up China deal, talks down Fed rates and dollar
* Chinese inflation subdued ex-food, U.S. CPI due next
* Oil prices turn lower again on demand concerns
By Marc Jones
LONDON, June 12 (Reuters) - World share markets snapped a seven-day winning streak on Wednesday as the White House took a tough line on trade talks with China, while an impending reading on U.S. inflation was set to refine the odds of an early cut in interest rates there.
Europe's main markets followed Asia by declining early on. London's FTSE .FTSE , the DAX in Frankfurt .GDAXI and CAC40 Paris .FCHI were down 0.2% to 0.4% as traders trimmed some of June's 4% gains. .EU
Benchmark government bond yields fell as caution grew. FX dealers kept the dollar near an 11-week low before the U.S. data, having priced in the first U.S. rate cuts since the financial crisis.
"I think we are in for a very nervous wait until next week's FOMC meeting," Saxo Bank's head of FX strategy, John Hardy, said.
"You have had the markets taking out aggressive positions on where the Fed is going to go and everybody is wondering whether they are ready to deliver as much, in terms of guidance, as has been priced in."
Chinese inflation was in the mix, too. Figures overnight showed it picked up to a 15-month high of 2.7%, mainly because of surging pork prices. Excluding food, inflation rose only 1.6% and suggested plenty of scope for more stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had slipped 0.6% after two days of gains. Wall Street's recent rally ended on Tuesday. .N
Japan's Nikkei .N225 dipped 0.3%. Shanghai blue chips .CSI300 fell 0.7% following a 3% jump the day before.
Hong Kong's Hang Seng .HSI lost 1.7% as demonstrators stormed roads next to government offices to protest against a bill that would allow people to be sent to China for trial. impact was short-lived in the past," noted Alex Wong, director at Ample Finance Group in Hong Kong. "This time people will look at how the U.S. reacts to this kind of news. The U.S. attitude towards Hong Kong and China are also not the same."
President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five "major points", which he did not specify. He said interest rates were "way too high" and the Federal Reserve had "no clue".
Fed policymakers will meet on June 18-19. With trade tensions rising, U.S. growth slowing and hiring in May declining, markets have priced in at least two rate cuts by the end of 2019. Futures FEDWATCH imply around an 80% chance of an easing as soon as July.
That might change depending on what U.S. consumer price data show later in the session. Headline inflation is expected to slow to 1.9%, with the core rate steady at 2.1%.
OIL TOILS Trump also alarmed currency markets by tweeting that the euro and other currencies were "devalued" against the dollar, putting the United States at a "big disadvantage".
The euro gained to $1.1336 EUR= , just short of the recent three-month high of $1.1347. The dollar fell against the yen to 108.25 JPY= and stalled on a basket of currencies at 96.608 .DXY .
"The President's tweets on the USD have the potential to have much more lasting impact in the coming election year," said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank (DE:DBKGn). "Global conditions are nicely set for what has colourfully been described as a 'currency war' or a currency race to 'the bottom'."
The Turkish lira weakened before a central bank that's expected to leave Turkey's main interest rate unchanged at 24%. In commodity markets, all the chatter of rate cuts kept gold near 14-month highs at $1,335.51 per ounce XAU= .
Oil prices dropped over 2% as concern about a global economic slowdown offset expectations that OPEC and its allies will extend their supply curbs. O/R
Hedge fund managers have been liquidating bullish oil positions at the fastest rate since late 2018 amid growing economic fears. crude LCOc1 futures fell $1.4 cents to $60.87, while U.S. crude CLc1 lost $1.2 to $52.10 a barrel.
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https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations
https://tmsnrt.rs/2Dr2BQA Past trade spats have caused dollar depreciation
https://tmsnrt.rs/2WR0HkT
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