GLOBAL MARKETS-Stocks fall as central banks flag global risks

By Marc Jones

LONDON, March 20 (Reuters) - World markets slipped on Thursday as signals from the U.S. Federal Reserve and a number of other top central banks that they remain in rate cut mode amid global uncertainty kept the bears on top.

There was little reaction as Switzerland cut its interest rates back towards zero. Sweden kept its borrowing costs steady, while the Bank of England was also expected to sit tight with its latest rate decision at 1200 GMT.

Wall Street futures were still pointing higher, just about..N

The Fed on Wednesday had left U.S. rates unchanged too but traders were pleased to see it maintain a projection for two quarter-percentage-point rate cuts by year-end.

Policymakers did revise up their inflation forecast for the year and marked down their outlook for economic growth, citing risks from U.S. President Donald Trump's tariff policies.

Still, investors took comfort from the Fed's "dot plot" and Chair Jerome Powell's comments that tariff-driven inflation would be "transitory" and largely confined to this year.

"We think unemployment will be the ultimate arbiter," PIMCO economist Tiffany Wilding said, predicting the Fed would "cut aggressively" if the jobless rates starts to move higher.

The prospect of further Fed easing this year saw gold XAU= scale yet another record high of $3,057.21. GOL/

In the bond markets U.S. Treasury yields dipped to 4.22% and Germany's Bund yields DE10YT=RR eased to 2.77% after hitting their lowest - 2.748% - in almost two weeks the day before and well down from last week's the 1-1/2 year high of 2.938%. GVD/EUR

That had all kept the dollar .DXY near its recent 5-month low although it managed to nudge up 0.2% to $1.0893 against the euro EUR=EBS, $1.2971 against the pound GBP= and to 148.40 yen JPY=EBS.

Sterling GBP=D3 had been as high as $1.3015 - a four month high - overnight. The Bank of England has its March interest rate decision later and, like the Fed, is expected to stay on hold - at 4.5% in the BoE's case.

"We expect the (Monetary Policy Committee) members to signal the desire to see further disinflation as a reason to keep policy on hold this month. They will affirm that the policy direction remains towards further easing, but the timing will be data-dependent," ANZ analysts said.

Both Switzerland's SNB and Sweden's Riksbank had already come out with their decisions.

The former trimmed it borrowing costs back to just 0.25% with a warning about U.S. trade tariffs, while the Swedes kept theirs at 2.25% amid stubborn inflation and a sluggish economy.

There was little reaction, other than a fractional dip by the Swiss franc CHF=.

SNB Chairman Martin Schlegel said uncertainty around the global economy and inflation had increased significantly.

"As a result, the outlook for inflation in Switzerland too is currently very uncertain. At present, the risks are predominantly to downside," he said after the SNB's rate decision.

CHINA DRAGS

The post-Fed cheer had failed to rally Asia overnight, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS finishing its day flat.

That was mainly due to China and Hong Kong.

Both markets have been on hot streaks this year, but Thursday's 2.2% drop in the Hang Seng .HSI was its worst of the month and Chinese online giants Tencent .0700HK and Baidu 9888.HK both tumbled nearly 4% as their respective 30% and 70% gains this year ran out of steam.

Carlos von Hardenberg co-founder of MCP Emerging Markets described the recent surge in China tech stocks as "a bit of a suckers rally, because it reached the point where the valuation was getting completely out of whack".

"I think it could evaporate almost overnight because we are in the middle of a gigantic war about technology leadership."

China's central bank had held its benchmark lending rates steady for the fifth straight month on Thursday, matching market expectations.

The yuan CNY=CFXS, which has been pressured by China's wide yield differentials with the United States, barely budged at 7.2354 per dollar in the onshore market. Its offshore counterpart CNH=D3 inched down 0.1% to 7.2383 per dollar.

Elsewhere, the Australian dollar AUD=D3 tumbled 1% in response to weaker-than-expected employment figures while data showing New Zealand's economy grew faster than forecast at the end of last year could prevent a 1.2% drop in the Kiwi dollar NZD=D3.

In commodities, oil prices ticked higher owing in part to an escalation of tensions in the Middle East as more Israeli airstrikes across Gaza left the ceasefire with Hamas all but over.

Brent crude futures LCOc1 rose 0.6% to $71.24 a barrel, while U.S. West Texas Intermediate crude (WTI) CLc1 made similar gains to $67.52 per barrel. O/R