EMERGING MARKETS-Risk aversion puts EM assets subdued; spotlight on Turkey, Poland

By Pranav Kashyap

Sept 3 (Reuters) - Most emerging market currencies and stocks hovered in limbo on Wednesday amid a risk-off sweep, while investors awaited a rate decision in Poland.

The gauges tracking emerging market stocks .MSCIEF and currencies .MIEM00000CUS were largely flat. A global selloff in government bonds lingered from the prior session, while political strains in Thailand and Indonesia kept sentiment muted. Safe-haven gold XAU= hovered at record-highs.

The Turkish lira TRY= swung between gains and losses as investors parsed data showing annual inflation eased, but fell short of expectations.

Equities .XU100 dropped 2% for a fourth straight day, on track for the longest losing streak in over three months, after the biggest intraday slide in five months.

Political jitters mounted after a court ousted Istanbul's CHP provincial chief, spooking investors out of Turkish stocks and bonds.

With the central bank meeting next Thursday and likely to cut rates again, fresh turmoil could force a more cautious stance, echoing March, when protests after the detention of President Tayyip Erdogan's main rival prompted intervention to steady markets.

"The data.. keeps the door open to large interest rate cuts at the central bank's meeting. One upside risk is that renewed political turmoil could prompt the central bank to act more cautiously," said William Jackson Chief emerging markets economist at Capital Economics.

Meanwhile, the Polish zloty EURPLN= was flat and could potentially snap its longest daily winning streak against the euro in over six months.

With recent data pointing to inflation moving back to the target zone, the National bank of Poland is expected to lower rates by 25 basis points to 4.75% at 13:00 GMT.

Stocks in Warsaw .WIG20 rose 0.8%. The rate decision comes at a time when investors continue to fret over a projected 6.9% deficit - more than double the EU's 3% cap.

U.S. President Donald Trump will welcome Polish President Karol Nawrocki in the White House later in the day.

Other currencies in central and eastern Europe were largely flat.

Investors exercised caution ahead of U.S. nonfarm payrolls on Friday, preceded by data on job openings and private payrolls, giving clarity on the labour market that has become the focus of policy debate at the Federal Reserve.

In Asia, Thai stocks .BETI gained nearly 1% while the baht THB= slipped 0.3%. The ruling Pheu Thai party moved to dissolve parliament and call snap elections, defying the largest parliamentary bloc's bid to form an alternative government.

Indonesian markets were mixed, with the rupiah IDR= weakening 0.1% and equities .JKSE gaining 0.8% as investors monitored escalating civil unrest.

Investors continued to book profits in Chinese equities, with Shanghai stocks .SSEC down 1.2%, while Hong Kong's .HSI and China's .CSI300 lost 0.6% each.

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For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB