MUMBAI, July 16 (Reuters) - Indian government bond yields are expected to open barely changed on Tuesday, as traders await fresh triggers in the form of a debt supply on Friday and the federal budget announcement early next week.

The benchmark 10-year yield is likely to move in a 6.96%-7.00% range, after closing at 6.9767% in the previous session, a trader with a private bank said. Indian markets will be shut on Wednesday for a local holiday.

"We had seen some moves yesterday, but today we can expect lacklustre trading, as traders will hold on till the major event of budget announcement," the trader said.

The government will announce the budget on July 23, with major focus on the fiscal deficit target and gross borrowing figures.

India has room to cut its current year's gross market borrowing following a better-than-estimated surplus transfer from the central bank and amid strong revenue collections, Neeraj Gambhir, head of treasury at Axis Bank said.

The final budget could see gross borrowing coming down by 500-750 billion rupees. In the interim budget, the government announced gross borrowing of 14.13 trillion rupees, with a fiscal deficit target of 5.1% of gross domestic product.

New Delhi also aims to raise 310 billion rupees ($3.71 billion) through sale of bonds, which includes 200 billion rupees of the benchmark note, on Friday.

U.S. yields rose on Monday on growing bets of Donald Trump winning the presidential race after surviving an assassination attempt over the weekend. The 10-year yield was around 4.22% in Asian hours.

Analysts expect a Trump victory could potentially lead to stronger growth, higher inflation and more debt supply.

The probability of the Federal Reserve starting its rate easing cycle in September is now 100%, with a 13% chance of a greater than 25 basis point cut. The odds of 75 bps cuts in 2024 rose to 62% from 54% a day ago, according to the CME FedWatch Tool.

KEY INDICATORS:

** Brent crude futures were 0.3% lower at $84.65 per barrel, after falling 0.2% in previous session

** Ten-year U.S. Treasury yield at 4.2158%, two-year yield at 4.4512%

** Six states to raise 65.90 billion rupees via sale of bonds ($1 = 83.5840 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Varun H K)