* Asian stock markets : tmsnrt.rs/2zpUAr4
* Nikkei off 0.3% early, Asia markets modestly lower
* U.S. retail sales strong, but market still set on Fed cut
* Dollar gains as sterling stricken by hard-Brexit fears
* Oil prices slide on supply data, mixed messages on Iran
By Wayne Cole
SYDNEY, July 17 (Reuters) - Asian shares drifted lower on Wednesday after a lacklustre performance by Wall Street, while the dollar got a lift from robust U.S. retail data and a Brexit-driven dive in the pound.
Oil prices also took a spill on hints U.S. tensions with Iran could be easing and as data showed stockpiles fell by less than expected last week.
Early action was muted with MSCI's broadest index of Asia-Pacific shares outside Japan off 0.18%.
Japan's Nikkei eased 0.3% and South Korea 0.8%. E-Mini futures for the S&P 500 were flat.
A surprisingly strong reading on U.S. retail sales released overnight had outweighed weakness in industrial production for the June quarter and boosted the dollar.
Yet, it barely budged market wagers on a Federal Reserve rate cut this month, with Chicago Fed President Charles Evans touting 50 basis points of easing.
Futures are 100% priced for a cut of 25 basis points, and imply a 27% chance of 50 basis points.
"We do not expect these solid (retail) results to impact the Fed's decision to cut rates at the end of the month," said Michelle Girard, chief U.S. economist at NatWest Markets.
"The Fed knows the U.S. consumer is strong; policymakers are worried about the downside risks associated with global growth and weak manufacturing/business investment, which is why they believe a rate cut is appropriate."
Analysts at Barclays were even more dovish, arguing persistent uncertainty and soft inflation warranted quarter-point cuts in July, September, and December.
Expectations of policy stimulus, and the resulting drop in bond yields, helped counter concerns about corporate profits.
JPMorgan Chase & Co and Wells Fargo & Co beat quarterly profit estimates but reported weaker net interest income. Bank of America and Netflix report on Wednesday.
The Dow eased 0.09%, while the S&P 500 lost 0.34% and the Nasdaq 0.43%. Not helping the mood was a threat from U.S. President Donald Trump to put tariffs on another $325 billion of Chinese goods.
In currency markets, sterling was the star for all the wrong reasons. It slid 0.9% overnight to 27-month lows amid fears the UK could tumble out of the European Union with no trade deal to soften the blow.
The pound was last at $1.2409, a big come-down from its March peaks of $1.3383.
The dollar was a major beneficiary at 97.381 on a basket of currencies, having risen 0.5% overnight. The euro fell back to $1.1210, while the dollar firmed to 108.27 yen .
The dollar's gains tarnished gold a little, with the precious metal easing to $1,403.57 per ounce from a high above $1,418 on Tuesday.
Oil prices tried to steady in early trade after falling more than 3% overnight. Brent crude futures edged up 17 cents to $64.52, while U.S. crude was flat at $57.62 a barrel.
Editing by Shri Navaratnam