MUMBAI, July 15 (Reuters) - Indian government bond yields are expected to open marginally higher on Monday after stronger-than-expected local inflation data, which may further discourage talks of policy easing, while U.S. yields were marginally lower.

The benchmark 10-year yield is likely to move in a 6.97%-7.02% range, after closing at 6.9882% in the previous session, a trader with a private bank said.

"We could see the benchmark yield opening around the 7% handle, but do not foresee any major selloff from that point, and also we are not seeing any large reactions in other markets post the shooting incident," the trader said.

U.S. yields were marginally lower on Friday as economic data bolstered expectations that the Federal Reserve was likely to cut interest rates in September.

The 10-year yield was below 4.20% in Asian hours, after Republican presidential candidate Donald Trump survived an assassination attempt, which could increase risk-off sentiment.

The probability of the Fed cutting rates by 25 basis points in September has remained close to 93%, especially after a surprise dip in inflation, which continues to favour the bulls.

The market is anticipating 62 bps of cuts in 2024, according to the CME FedWatch Tool.

Still, for the day, markets are expected to react negatively to India's retail inflation, which accelerated for the first time in five months in June, with the reading at 5.08%, ahead of 4.80% forecast in a Reuters poll.

The Reserve Bank of India's tone is likely to get even more cautious on food inflation risks. As a result, it is expected to remain on pause in its August meeting and keep policy stance unchanged, said Gaura Sen Gupta, chief economist at IDFC First Bank.

"The earliest RBI can cut interest rates is in October/December. By this period there will be greater clarity on food inflation risks and Fed policy."

KEY INDICATORS:

** Brent crude futures were 0.2% higher at $85.20 per barrel, after falling 0.4% in previous session

** Ten-year U.S. Treasury yield at 4.1867%, two-year yield at 4.4577%

** India to switch government bonds worth 250 billion rupees ($2.99 billion) ($1 = 83.5090 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Varun H K)