Updates prices, adds China economic data in paragraphs 13-14

By Wayne Cole

SYDNEY, July 15 (Reuters) -U.S. bond futures slipped and the dollar firmed on Monday as investors wagered the attack on U.S. presidential candidate Donald Trump made his victory more likely, while injecting a whole new level of political uncertainty into markets.

A holiday in Japan made for thin trading conditions and the early action was confined to a modest rise in the dollar while Treasury futures slipped.

Investors have tended to react to the prospect of a Trump win by pushing Treasury yields higher, in part on the assumption his economic policies would add to inflation and debt.

Proposals to levy tariffs on imports would push prices higher while eating into consumer spending power. Meanwhile, restrictions on migration could tighten the labour market and put upward pressure on wages.

"The market reaction function to a Trump presidency has been characterized by a stronger U.S. dollar and a steepening of the U.S. Treasuries curve, so we might observe some of that this coming week if his election odds are assessed to have further improved following this incident," said Rong Ren Goh, a portfolio manager at Eastspring investments in Singapore.

Online betting site PredictIT has a Republican win at 66 cents, from 60 cents on Friday, with the Democrats at 38 cents. The current odds indicate that Republicans are twice as likely to win the election as Democrats.

The dollar edged up 0.3% on the Japanese yen to 158.05 JPY=EBS but remained well short of its recent 161.96 top following a bout of suspected intervention.

The euro eased slightly to $1.0887 EUR=EBS, and the dollar index firmed a shade to 104.26 =USD.

Futures for 10-year Treasuries slipped 13 ticks TYc1, while cash bonds were untraded due to the Japanese holiday.

S&P 500 futures ESc1 and Nasdaq futures NQc1 were both marginally higher.

Japan's Nikkei .N225 was shut, but futures NKc1 were trading at 41,285 compared to a cash close of 41,190.

CHINA DATA MISSES

Disappointing data began a busy week in China, where aonce-in-five-year gathering of top officials runs from July 15-18.

Second-quarter growth in the world's second-largest economy was 4.7% higher than a year earlier, against forecasts for 5.1%, and retail sales growth was a sluggish 2% annualised in June, against expectations of 3.3%, keeping pressure on Beijing to come up with support measures.

New home prices dropped at their fastest pace in nine years.

The yuan CNY=CFXS was under pressure at 7.2608 per dollar and mainland stocks .SSEC slipped and Hong Kong's Hang Seng index .HSI was last down 1%. .SS

Later this week,the United States will release data on retailsales, industrial production, housing starts and weekly jobless claims.

Federal Reserve Chair Jerome Powell will appearlater on Monday and is bound to be asked for his reaction to last week's subdued inflation reading.

Markets are pricing in a 94% chance the Fed will cut rates in September, up from 72% a week earlier. FEDWATCH

The European Central Bank meets on Thursday and is considered certain to hold rates at 3.75%, ahead of another cut seen likely in September. 0#ECBWATCH

Among the host of companies reporting earnings this week are Goldman Sachs, BlackRock, Bank of America, Morgan Stanley, Netflix and Taiwan Semiconductor Manufacturing.

In commodity markets, gold held at $2,408 an ounce XAU=, just off last week's top of $2,424. GOL/

Oil prices inched up, having fallen on Friday amid signs of progress on a ceasefire between Israel and Hamas. O/R

Brent LCOc1 gained 8 cents to $85.11 a barrel, while U.S. crude CLc1 rose 8 cents to $82.29 per barrel.

Reporting by Wayne Cole. Additional reporting by Tom Westbrook in Sydney; Editing by Lisa Shumaker and Christian Schmollinger

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA