* European shares fight to snap five-day losing streak
* BoE keeps view that more rate cuts coming despite data
* SNB repeats Swiss franc intervention promise
* MSCI Asia Pacific index down 0.1 pct, Nikkei loses 0.6 pct
* Wall Street set to open higher, data deluge due
* US, Japan long-term bond yields stay near recent peaks
By Marc Jones
LONDON, Sept 15 World stocks steadied at
two-month lows on Thursday although bond markets stayed in the
red as two of Europe's top central banks keep their interest
rates pointing firmly downwards - a full eight years on from the
collapse of Lehman Brothers.
Europe's main stock markets in London, Frankfurt
and Paris spent most of the day struggling to
stay in positive territory as the region attempted to pull out
of a five-day losing streak.
Wall Street, which was marking the Lehman anniversary, was
set for a modestly higher start with a deluge of data from
retail sales to inflation and weekly jobless claims to
take traders' minds off this week's market drubbing.
Primarily the rout has been caused by nagging concerns that
having resorted to previously unthinkable measures like negative
interest rates and mass money printing, top central banks are
now running out of options to get their economies going.
It has been particularly evident in bond markets. Yields,
which move inverse to price, crept up again in Europe though the
real power driver - the 10-year U.S. Treasury yield
- steadied at close to 1.71 percent as U.S. trading loomed.
"We are 150 percent focused on the fixed-income selloff,"
said State Street's head of global macro strategy Michael
"The market concern is that the central bank support is
going to be different going forward," he said, adding that
tandem falls in equity and bond markets pointed to "a big unwind
That theme of central bank policy effectiveness was live.
Switzerland's central bank kept its key interest rates deep
in negative territory and repeated that it was willing to
intervene in FX markets to keep down what it still sees as a
"significantly overvalued" Swiss franc.
The franc barely budged.
Sterling didn't move much either as the Bank of
England stood pat in London, having cut rates and ramped up its
stimulus programme last month in a bid to limit any Brexit
damage to the UK economy.
It repeated that it was likely to cut rates again towards
the end of the year but also acknowledged that "a number of
indicators of near-term economic activity have been somewhat
stronger than expected," and that growth probably wouldn't slow
down as much as originally thought over the rest of the year.
"The BoE is important in a broader sense for the market,"
said State Street's Metcalfe, saying it sent "the message that
at least one of the major central banks is still being as easy
as can be."
The yen inched higher as investors sought safe havens in the
face of a shaky atmosphere on stock markets, though the dollar
was firmer for the most part against the major and emerging
market currency pairs.
The day's deluge of U.S. data includes August retail sales
due at 8:30 a.m. ET (1230 GMT) which are expected to show weaker
car sales. Also due are reports on producer prices, industrial
output and weekly jobless claims.
A soggy Asian session had seen the Nikkei in Tokyo
slide 1 percent following Wednesday's uninspiring performance
from Wall Street where the Dow lost 0.2 percent and the
S&P 500 shed 0.1 percent.
Both the U.S. Federal Reserve and the Bank of Japan hold
policy meetings that conclude next Wednesday. The BOJ is in
particularly focus with it due to comprehensively review its
Sources say board members could debate cutting the bank's
rates further as well as making changes to its already massive
Among commodities, Brent crude limped up 0.8 percent
to $46.21 a barrel after dropping 2.6 percent on Wednesday when
data showing large weekly builds in U.S. petroleum products
offset a surprise draw in crude stockpiles.
Metals markets were drifting for the most part with China's
exchanges now closed for the rest of the week for a public
holiday, while gold, which investors often see as a
safe-haven asset, slipped fractionally amid the cautious market
Emerging markets continued to be buffeted by that caution
too with key currencies falling and a fifth day of falls for
MSCI's closely followed 27-country EM index.
There was some good news for Ukraine though as IMF agreed
after a delay of almost a year to hand over the latest
instalment of its $17.5 billion four-year bailout although it
wasn't quite as much as had been expected.
India's rupee went on a wild ride after a television
channel reported the country's commerce ministry was calling for
a devaluation to promote exports, though that was later denied
by the finance ministry. The currency initially fell about 0.8
percent before making up ground to be about 0.3 percent down on
"The tailwind for asset prices is not as strong as it was,"
said Peter Kinsella, head of emerging markets research at
"We have had more hawkish rhetoric from the Fed, which has
led to profit taking in risky assets and all the high-beta
stories in emerging markets have taken a backseat."
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Editing by Hugh Lawson)