GLOBAL MARKETS-Stock rally pauses as rate cut cheer meets recession fears

* Asian stock markets : https://tmsnrt.rs/2zpUAr4 * S&P 500 futures steady after strong gains * Euro and German two-year yields drop after weak data * China eases, Switzerland tipped for at least 25bp rate cut * Gold stays close to all-time peak * Dollar-yen remains volatile * * * (Updates prices) By Naomi Rovnick and Wayne Cole LONDON/SYDNEY, Sept 23 (Reuters) - World stocks were pinned close to record highs on Monday as investors turned their attention to China and Switzerland as the next destinations for monetary easing after last week's jumbo rate cut by the U.S. Federal Reserve. Markets were awaiting U.S. inflation data later this week, which traders expect to confirm forecasts for more easing there. Meanwhile, China's central bank lowered its 14-day repo rate by 10 basis points, days after disappointing markets by not cutting longer-term rates. MSCI'S broad index of world stocks .MIWD00000PUS held steady after two weeks of gains. Europe's Stoxx share index .STOXX traded flat and Wall Street stock futures wobbled between small gains and losses ESc1 NQc1 The Fed cut rates by a half point last week, from a 23-year high, and money markets are pricing a 50% probability it will deliver another outsized move in November. FEDWATCH . More than 20 billion shares changed hands on U.S. exchanges on Friday, the busiest session since January 2021, after the S&P 500 reached all-time highs. However, investors are divided over whether global monetary easing may have started too late to stop a slowdown, or even a U.S. recession, from taking hold. Christoph Schon, multi-asset strategist at Simcorp, noted that the last two times the Fed started monetary easing with 50 basis point cuts were in 2008 and 2001, which were years of severe downturns. "Every time we hear this time is different and maybe this time it is, but there is now growing concern," he said. Markets would also be unsettled, he added, if unexpectedly strong growth or inflation data reduced expectations for future rate cuts. Soft U.S. labour market data and brisk retail sales have generated confusion over the true state of the world's largest economy. In Europe, purchasing manager surveys on Monday showed France's services sector contracted sharply in September and German business activity decreased by its sharpest pace in seven months. Brent Crude oil, steady at $73.31 a barrel on Monday, LCoC1 is almost 14% below its late-June level despite escalating Middle East tensions. Gold, at $2621 an ounce on Monday, is also trading just below an all-time peak XAU= , reflecting its popularity as a haven in times of uncertainty and with hedge funds holding their largest bet on the yellow metal since 2020. MORE CUTS The Swiss National Bank meets on Thursday and markets are fully pricing a quarter-point cut to 1.0%, with a 41% chance it will ease by 50 basis points. 0#SNBWATCH Sweden's central bank meets on Wednesday and is also expected to ease by 25 basis points, again with some chance it might go larger. Traders are also raising their bets on another European Central Bank cut in October. German two-year bund yields DE2YT=RR dropped roughly 10 bps on Monday to 2.156% following the PMI data. Bond yields move inversely to prices. Whether the market mood changes could depend on what the Fed's preferred inflation gauge, the core personal consumption expenditures (PCE), shows on Friday. Analysts expect a 0.2% month-on-month rise, taking the annual pace to 2.7%. The coming week also includes surveys on U.S. consumer confidence and durable goods orders. In currency markets, the euro dropped 0.5% against the dollar to $1.107 EUR=EBS . Japan's yen JPY=EBS firmed 0.2% to 143.61 per dollar as volatility in this currency pair JPY3MO=R , which has climbed as traders debate how far the dovish Bank of Japan will hike rates and how deeply the Fed will cut, stayed elevated. MSCI's gauge of Asia-Pacific shares outside Japan .MIAPJ0000PUS bounced 2.7% higher last week and gained a further 0.2% on Monday. Stock markets in Tokyo were closed for a holiday but futures contracts NKc1 traded at 38,510 compared to a cash close of 37,723 and Singapore's main share index .STI rose to its highest since late 2007. The yield on the 10-year U.S. Treasury was 2 bps higher at 3.7432%. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Naomi Rovnick and Wayne Cole; Editing by Shri Navaratnam, Angus MacSwan and Susan Fenton) (([email protected]; 612 9171 7144; Reuters Messaging: [email protected])) ((To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA ))