*

Investors shrug off Moody's US credit downgrade

*

Super long Japanese government bond prices fall sharply

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Dollar drifts as selloff in Treasuries ease

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RBA cuts rates as expected, Aussie down 0.5%

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CATL debuts in Hong Kong in world's biggest listing this

year

(Updates with early European trading)

By Ankur Banerjee, Johann M Cherian and Alun John

SINGAPORE/LONDON, May 20 (Reuters) - World stocks rose

on Tuesday and Treasury yields steadied, allowing a bit of a

breathing room for the U.S. dollar as investors took stock of

the debt load of the world's biggest economy.

Investors were still processing Monday's market moves when

Treasuries initially sold off sharply on worries about the U.S.

fiscal position, and stocks struggled on Wall Street, before

both rebounded in late trading.

That calm was maintained in Asian and

European trading, where broad equity indices were each

up around 0.1% and Germany's Dax hit a new record high,

though S&P 500 share futures dipped.

Moody's late on Friday downgraded the U.S. credit rating,

unerscoring worries about the impact of a major tax cutting bill

proceeding through Congress, which faces a crucial vote later

this week.

The U.S. 10-year yield was last down 3 basis

points at 4.44% having hit a one-month high of 4.56% on Monday,

and the 30-year bond yield fell a similar amount to

4.91% after hitting an 18-month high of 5.037% in the previous

session.

"The quick recovery was a bit of a surprise even though we

were in the camp of it only having a limited impact," said Mohit

Kumar, chief Europe economist at Jefferies. He said the

downgrade was not unexpected given concerns over U.S. debt and

deficits.

However, in a sign of broader market nervousness, Japanese

super-long bond yields soared to all-time highs on Tuesday, with

the immediate precipitating factor a poor auction of 20-year

securities.

The Japanese 20-year yield jumped as much as

15 bps to 2.555% its highest since 2000, and the 30-year yield

hit a record high of 3.14%.

JGBs are no exception to the global trend of rising yields,

said Hirofumi Suzuki, chief currency strategist at Sumitomo

Mitsui Banking Corp.

"Market participants are ... assessing demand during each

auction, and stability remains elusive. I think that the upward

pressure is likely to persist for the time being."

UNEASY RBA

Global investors had a few other things to process too on

Tuesday, and the Australian dollar slipped 0.5% to

$0.64255 after the Reserve Bank of Australia lowered interest

rates as expected, citing a darker global outlook, though it

also remained cautious on further easing.

"With the RBA sounding increasingly uneasy, the path of

least resistance for the currency may remain lower," said Charu

Chanana, chief investment strategist at Saxo in Singapore.

"Especially if domestic data softens further or global risks

flare up again."

China's blue-chip index climbed 0.6% after its

central bank cut benchmark lending rates for the first time

since October.

Also in the spotlight was a strong Hong Kong market debut

from CATL, as the Tesla battery supplier

started 12.5% higher. The firm raised $4.6 billion in its Hong

Kong listing, the largest in the world this year.

Back in currency markets, the euro was up 0.2% at $1.1265,

holding onto Monday's 0.6% gain, and the dollar was

also down 0.38% against the Japanese yen at 144.27, again after

sliding Monday.

In commodities, oil prices nudged higher as investors tried

to get a grip on a potential breakdown in talks between the U.S.

and Iran over Tehran's nuclear activity and weakened prospects

of more Iranian crude supply entering the market.

Brent futures were last up 0.34% to $65.75 a barrel.

Gold slipped 0.2% to $3,220 per ounce as safe haven

demand dipped.