*

Stoxx 600 flat, euro higher

*

Asian stocks pare early losses on global trade war fears

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Safe-haven assets including Japanese yen strengthen

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U.S. stock futures steady; Nasdaq lost 4% on Monday S&P

500 2%

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Gold up further 0.7%

(Updates with early European trading)

By Ankur Banerjee and Alun John

SINGAPORE/LONDON, March 11 (Reuters) - Tumbling stock

markets and rallying Treasuries steadied somewhat Europe on

Tuesday, as a modicum of calm returned to markets after the

previous day's dramatic moves when the Nasdaq saw its biggest

one-day fall in over two years.

Europe's broad Stoxx 600 index was flat in early

trading, Asia Pacific-ex Japan shares, which had

been down around 1.75% earlier in the day were last just 0.5%

lower, and U.S. share futures were up around 0.3%.

This was in stark contrast to Monday, when investors'

concerns about a potential economic slowdown were exacerbated

after President Donald Trump in a Fox News interview talked

about a "period of transition" and declined to rule out a

recession.

The S&P 500 fell 2.7% on Monday, its biggest one-day

drop this year, while the Nasdaq slid 4.0%, its biggest

single-day percentage drop since September 2022.

Prashant Newnaha, a senior Asia-Pacific rates strategist at

TD Securities, said most traders had previously believed Trump

would blink if stocks tanked.

"Markets have now gotten the memo that the administration is

intent on ripping the band-aid off. Tariffs and recession may be

the medicine to create disinflation and getting that 10-year

yield lower. For now it's a controlled demolition."

Meanwhile, a rush to U.S. Treasuries saw the yield on

benchmark U.S. 10-year notes fall 10 basis points on

Monday its largest daily move in almost a month. It was another

2 basis points lower on Tuesday at 4.12%.

The two-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

fell to a five-month low and was last down 1.5 bps at 3.88%.

Traders are now pricing in 85 bps of easing from the Fed

this year, compared to 75 bps on Monday, LSEG data showed,

betting weak U.S. growth will compel the Federal Reserve to

start easing again.

"If we were to see the economy move into recession, they

are going to cut a lot more," said Idanna Appio, portfolio

manager, First Eagle Investment Management.

Wednesday's U.S. consumer price index could scuttle those

expectations if it confirms that inflation is still a

problem.

Investors are mindful of last month's hotter-than-expected

data that saw inflation rise 0.5% in January, its biggest

monthly gain since August 2023. February's CPI is expected to

have climbed 0.3%, according to a Reuters poll.

"Near-term, inflation is sticky and tariffs are likely to

lead to inflation, so are the shifts in immigration policies,"

said Appio.

In currency markets, safe havens remained in demand, but

moves were less dramatic than the day before. The Japanese yen

reached its strongest in five months against the dollar before

giving up gains to trade flat at 147.2. Still, the yen

is up 7% against the dollar in 2025.

The euro also strengthened 0.6% to $1.10898.

In commodities, oil prices were steady as investors grappled

with worries that U.S. tariffs would slow economies around the

world and hurt energy demand while OPEC+ ramps up its supply.

Gold prices rose to $2,908 per ounce, within touching

distance of the record high hit last month. Gold is up 10% so

far in 2025 after climbing 27% last year.