* Traders move to price in hikes for BoE and ECB this

year

* Fed seen leaving rates on hold

* Hawkish rate repricing hits bonds

* Oil prices, shares remain choppy

(Updates throughout)

By Sophie Kiderlin and Rae Wee

LONDON/SINGAPORE, March 20 (Reuters) - Global shares

nudged higher but were still headed towards a weekly loss on

Friday, while bonds steadied somewhat after the previous day's

rout as central bankers warned that the Middle East war could

reignite inflation.

A brief dip in oil prices earlier in the day offered some

temporary relief for markets, but trading stayed choppy and

nerves frayed, highlighting how brittle investor confidence

remains.

Following a busy week of monetary policy meetingsacross the

Group of Seven nations and others, the key takeaway for

investors has been the prospect of a more aggressive policy

tightening path.

"Clearly central banks have learned that it's very dangerous

to say that an energy shock is purely transitory," said Sandra

Horsfield, economist at Investec, while also noting the risk of

both direct and indirect effects.

"So hence we have a more hawkish-sounding reaction."

Traders are no longer expecting a Federal Reserve rate cut

this year, while futures imply a more than 50%

chance of a hike from the Bank of England next month

. Sources said the European Central Bank may need to

begin discussing rate increases in April and possibly tighten

policy in June, while markets saw an April hike from

the ECB as a coin toss.

"For the time being, though, sending a more hawkish message

seems a very sensible thing. But again, it's hawkish, but it's

not immediate action," Horsfield said.

A rout in global bonds pushed yields to multi-month highs on

Thursday, though markets appeared to be steadying to some extent

on Friday.

Germany's two-year yield, which is up over 57

basis points for the month, was last up 1.7 bps at 2.58%. Yields

on two-year British gilts were just over 3 bps higher

at 4.44%, having jumped close to 92 bps this month already.

In equities, Europe's cross-regional STOXX 600 rose

0.4% on Friday, but was still on track for a 1.7% weekly

decline, while the MSCI All-World index was set

to fall for the third consecutive week.

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

fell 0.5% on Friday. Nasdaq futures and

S&P 500 futures both nudged lower.

ENERGY CHOKEHOLD

Brent crude futures were 0.86% higher at $109.58 a

barrel, reversing earlier declines, while U.S. crude was

little changed, also after having pulled back earlier. Leading

European nations and Japan offered to join efforts to secure

safe passage for ships through the Strait of Hormuz and the U.S.

outlined moves to boost oil supply.

Natural gas prices have also soared, with those in Europe

skyrocketing as much as 35% on Thursday, as Iranian and Israeli

strikeshit some of the Middle East's most important gas

infrastructure.

That prompted U.S. President Donald Trump to tell Israel not

to repeat its attacks on Iranian natural gas infrastructure.

"Even if the U.S. leaves (the conflict), Israel might not

leave, and there may still be some strikes and Iran will

retaliate, maybe at a lower volume," said Alicia Garcia-Herrero,

chief Asia-Pacific economist ​at Natixis.

"But this means that the Gulf will still be under

pressure... so oil prices will not go back to $60, they will

maybe stay at $90, at least until the end of the year. So the

shock is already unavoidable."

DOLLAR FALLS FROM PEAK

The dollar was set for a weekly loss of roughly 1.1%,

despite nudging higher on Friday, as the Fed is now seen as the

only major central bank that is not expected to raise rates this

year.

That kept the euro holding onto most of Thursday's

1.2% gains to fetch $1.1562, while sterling dipped 0.22%

to $1.34, after a 1.3% rise the previous day.

The yen, which was on the cusp of 160 per dollar in

the previous session, last stood at 158.63.

The Japanese currency was also helped by some hawkish

comments from Bank of Japan Governor Kazuo Ueda on Thursday,

after the central bank held rates steady but maintained its bias

for tighter monetary policy.

In precious metals, spot gold was up 0.64% at around

$4,677 an ounce.