* Wall Street indices higher, European stocks slip
* Dollar edges up on more hawkish talk from Fed
* Focus on U.S. and China inflation data this week
* Treasury yields mixed after Friday's rally
NEW YORK/LONDON, Aug 7 (Reuters) - A gauge of global equities and the dollar edged higher on Monday, reversing downward moves after a mixed U.S. jobs report last week, as investors await U.S. and Chinese inflation data that could test the stock market's recovery this year.
The dollar recovered from a one-week low on Friday following data showing the U.S. economy added fewer jobs than expected in July, while solid wage gains and a drop in the unemployment rate suggested the Federal Reserve may keep rates higher for longer.
Additional interest rate hikes will likely be needed in order to lower inflation to the Fed's 2% target, Fed Governor Michelle Bowman said on Monday in remarks that largely repeated what she told a banking group on Saturday.
The dollar index, a measure of the U.S. currency against six peers, rose 0.02%, while Treasury yields were mixed, with shorter-dated bonds falling and long-dated securities rising.
A U.S. economy growing more than expected has pushed aside fears of a recession, but rising bond yields pose a risk to equity investors, said Phillip Colmar, global strategist at MRB Partners in New York.
"The bond market is coming back into the driver's seat again," he said, much as it was in 2022. "If the cost of capital isn't the thing causing economic damage here, as everybody predicted and our framework suggests it isn't, then it's pretty hard to argue for rate cuts."
MSCI's gauge of stocks across the globe gained 0.28%, while the pan-European STOXX 600 index lost 0.19%.
On Wall Street, the Dow Jones Industrial Average rose 0.91%, the S&P 500 gained 0.62% and the Nasdaq Composite added 0.18%.
U.S. corporate results have beaten greatly lowered expectations. With roughly 90% of S&P 500 earnings reported, results are 4% better than consensus estimates, with more than 79% of companies beating the Street, according to Refinitiv I/B/E/S data.
Results due this week include Walt Disney and News Corp.
Data on U.S. consumer prices to be released Thursday are forecast to show headline inflation picking up slightly in July to an annual 3.3%, but the more important core rate is seen slowing to 4.7%.
"Markets are waiting to see this week's CPI reports out of the U.S. and China," said Michael Hewson, chief market analyst at CMC Markets.
While bond markets might be driven this week by the U.S. bond issuance that has "played havoc" with yields, many economic data points show "significant disinflation is starting to take hold," he said.
Analysts have argued that Treasury supply hitting the market could pressure rates higher, as bond prices fall.
Futures imply only a 13.5% chance of a Fed rate hike in September, but expectations rise to 30.1% in November.
The Treasury Department plans on selling $103 billion in Treasuries this week as it faces a growing deficit and the need to balance the overall profile of its debt issues. Fitch last week downgraded the United States' credit rating.
Michael Gapen, an economist at BofA, warned that the market was still expecting too much policy easing next year given the recent run of resilient economic data.
As a result, the bank raised its year-end forecast for two-year and 10-year yields by 50 bps to 4.75% and 4%, respectively.
The shift in yields has aided the dollar. The euro fell 0.11% to $1.1, and the yen weakened 0.27% to 142.11 per dollar.
The strength in the dollar nudged gold down. Spot gold dropped 0.3% to $1,935.09 an ounce.
Oil prices edged lower following a protracted rally, but retained support from pledges by top producers Saudi Arabia and Russia to extend supply cuts through September.
U.S. crude recently fell 1.15% to $81.87 per barrel and Brent was at $85.32, down 1.07% on the day.
(Reporting by Herbert Lash; Additional reporting by Nell Mackenzie in London and Wayne Cole in Sydney; Editing by Andrew Heavens, Mark Potter and Andrea Ricci)
