*

Fed's Powell signals cautious approach to further rate

cuts

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Global stocks, currency markets tentative after Fed cut,

assess

future easing

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Bank of Canada cuts rates; New Zealand and Australia

stocks

falter

(Updates prices, adds China and Australia jobs data)

By Gregor Stuart Hunter

SINGAPORE, Sept 18 (Reuters) - Global stock markets were

choppy on Thursday after the Federal Reserve delivered its first

rate cut this year but signalled a measured approach to further

monetary policy easing, leaving investors in doubt about the

pace of future moves.

MSCI's broadest index of Asia-Pacific shares outside Japan

slipped 0.1% as declines in Australian and New

Zealand markets weighed on the wider benchmark, while Chinese

stocks veered between gains and losses.

There were signs of strength in some markets, however, as

U.S. equity futures advanced 0.4% after a uneven session

on Wall Street overnight, while shares in South Korea

jumped 0.8% and those in Taiwan rallied 0.4%. Japan's

Nikkei 225 tacked on 1%.

Global stocks stumbled on Wednesday after hitting a record

high in the wake of the Fed's quarter-point rate cut and

indications it would steadily lower borrowing costs for the rest

of this year.

However, in post-meeting comments, Fed Chair Jerome Powell

tempered the more aggressive easing expectations in markets,

saying Wednesday's move was a risk-management cut and the

central bank did not need to move quickly on rates.

"All told, we'd describe the decision and tone of the press

conference as balanced and restrained, and not at all dovish,"

ANZ analysts said in a note.

"Powell's focus on stronger U.S. GDP forecasts and still

elevated inflation projections seemed to create doubt in

investors' minds."

Those doubts fed into U.S. trading overnight, with the S&P

500 and the Nasdaq Composite closing down. Only

new Governor Stephen Miran, who joined the Fed on Tuesday,

dissented in favour of a larger 50-basis point cut.

Currency markets were similarly indecisive.

The U.S. dollar dropped to the lowest since February

2022 at 96.224 against a basket of major peers immediately after

the rate decision, but sprang back 0.1% higher on Thursday to

97.089.

The euro was steady at $1.181 after a knee-jerk

reaction to the Fed announcement saw it rise to the highest

since June 2021 at $1.19185.

The Chinese yuan traded flat at 7.103 after China's

central bank left the borrowing cost of its seven-day reverse

repurchase agreements unchanged on Thursday, declining to follow

the Fed.

Sterling was down 0.1% at $1.3621, having briefly

raced to the highest since July 2 at $1.3726 on Wednesday.

The Bank of England will announce its own policy decision

later on Thursday, and is widely anticipated to keep rates at

4%.

Traders are pricing in a 87.7% chance of another 25-bp cut

at the Fed's next meeting in October, compared to a 74.3%

probability a day earlier, according to the CME Group's FedWatch

tool.

"The Fed is still signalling more rate cuts, but at the same

time still sees okay growth, which is a positive combination for

share markets," said Shane Oliver, chief economist and head of

investment strategy at AMP in Sydney. "I do think the gains will

be a bit limited though, as markets have already had a big rally

in anticipation of the Fed cutting and so are due a pause or

near-term correction," he added.

The Bank of Canada also reduced its key policy rate by 25

bps to a three-year low of 2.5% on Wednesday, the first cut in

six months, and said it would be ready to cut again if risks to

the economy increased in coming months.

GROWTH CONCERNS

In New Zealand, the S&P/NZX 50 dropped 0.9% after data

showed a worse-than-expected economic contraction in the second

quarter. The kiwi dollar sank 0.7% against the

greenback.

Australia's market fared little better, falling 0.6%

led by a decline of as much as 13.6% in gas producer Santos

shares after a consortium led by Abu Dhabi's ADNOC

scrapped its $18.7 billion bid for the company, saying

commercial terms could not be agreed.

The Australian dollar slipped 0.2%, edging away from an

almost one-year high reached on Wednesday, after the release of

weaker-than-expected labour market data for August, with

employment unexpectedly falling as full-time positions dropped

back after a sharp rise the previous month. The jobless rate

held steady at 4.2%.

The data may create some weakness in the Australian

dollar, which had recently strengthened on hawkish comments from

the Reserve Bank of Australia, said Kerry Craig, global market

strategist at J.P. Morgan Asset Management in Melbourne. But he

said the bank still expected a rate cut in November.

Bond markets rallied after a pullback on Wednesday, with the

yield on benchmark 10-year Treasury notes sliding to

4.0718% compared with its U.S. close of 4.076% on Wednesday. The

two-year yield, which rises with traders'

expectations of higher Fed funds rates, rose a touch to 3.5385%.

Gold prices edged up 0.1% to $3662.33 per ounce,

recovering from a dip after hitting a record high on Wednesday.

Oil prices declined, with Brent crude last down 0.5%

at $67.62 per barrel.