RPT-GLOBAL MARKETS-Looming Fed decision locks down trading

                                
 (repeats, correcting spelling of 'Tullett' in paragraph 4)
                                
 By Mike Dolan
                                
 LONDON, April 30 (Reuters) - Global stock and bond markets
held steady on Wednesday as traders awaited another interest
rate cut from the U.S. Federal Reserve and assessed the
durability of April's recovery in equity and credit markets.
                                
 The Fed's latest interest rate decision is due at 1815 GMT
and interest rate futures markets show an 80 percent probability
that key rates will be cut by another quarter percentage point
to 2.0 percent. <FEDWATCH>
                                
 Fed lending rates have been lowered by three full percentage
points since September to ease the global credit crisis and
mounting banking stress.
                                
 But growing concern about commodity-fuelled inflation and a
steadying of world markets has prompted many investors to
speculate the Fed may at least pause its aggressive easing
should a cut occur on Wednesday's.
                                
 "There has been a dramatic shift in market attitudes about
today's U.S. FOMC announcement over the past month," Lena
Komileva, markets strategist at Tullett Prebon, said in a note
to clients. "However, we think that the Fed will stop short of
calling the end of the easing cycle."
                                
 
                                
 FED FREEZE
                                
 The uncertainty about the Fed outlook appeared to put market
trading on hold everywhere on Wednesday.
                                
 After a slightly lower close for Wall Street stocks <.SPX>
on Tuesday, the pan-European FTSEurofirst 300 index <.FTEU3> was
little changed at 0830 GMT at 1,327.69 points. A 0.8 percent
fall in the previous session broke a four-day winning streak.
                                
 Asia's bourses were also mixed. While Tokyo's Nikkei 225
<.N225> shed 0.3 percent on some disappointing corporate
earnings and a lower economic growth forecast from the Bank of
Japan, China's main stock market <.SSEC> ended up 4.8 percent.
                                
 MSCI's index of world stock markets <.MIWD00000PUS>, which
was 0.18 percent lower on Wednesday, has rallied more than 5
percent in April.
                                
 The stock market recovery and a parallel drop in corporate
borrowing premia came as fears eased about the stability of
western banking systems as the banks themselves moved to
recapitalise and also as many non-financial firms' first quarter
earnings surprised to the upside.
                                
 U.S. banking giant Citigroup <C.N> said late on Tuesday it
would sell $3 billion of common stock to bolster its capital
levels, following in the footsteps of multi-billion pound rights
issues from HBOS <HBOS.L> and Royal Bank of Scotland <RBS.L>.
                                
 Citigroup's <C.N> stock fell in after-hours trade but its
credit premia also fell slightly on the news.
                                
 On Wednesday, the Markit investment-grade iTraxx Europe
index <ITRAC5EA=GFI> of corporate credit premia was 0.75 basis
points wider at 75.75 basis points.
                                
 European corporate earnings were more mixed on Wednesday.
                                
 SAP <SAPG.DE> was among the strongest negative weights on
broad stock index, falling 4.8 percent after the business
software maker delayed a rollout of new software and reported
weaker-than-expected first-quarter sales and earnings.
                                
 On the upside, Siemens gained 2.7 percent Chief Executive
Peter Loescher said he was guardedly optimistic about the second
half of 2008 but expected consequences of the current financial
crisis to spill over into other areas.
                                
 Looking ahead, S&P 500 futures <SPM8> were a fraction higher
in London trading.
                                
 "We are entering the critical phase of the week with U.S.
data," said Peter Dixon, UK economist at Commerzbank. "We've got
all sorts of stuff coming out which is going to determine the
U.S. market."
                                
 
                                
 GDP SNAPSHOT
                                
 Financial markets were also awaiting U.S. gross domestic
product (GDP) data later in the day. According to a Reuters
poll, the report at 1330 GMT is expected to show the U.S.
economy braked sharply in the first quarter, growing at its
slowest pace in five years, as consumers curbed spending and
jobs disappeared. [ID:nSP245205]
                                
 The dollar held steady just above 104 yen <JPY=>. The euro
also stood at around $1.5550 as traders awaited the Fed.
                                
 The euro has fallen sharply since hitting a record $1.6018
last week. That dollar surge helped knock U.S. crude oil <CLc1>
back to $115.80 a barrel from last week's high near to $120.
                                
 "The dollar's movement is now the biggest factor in moving
oil prices rather than supply and demand," said Lee Moon-bae, an
analyst at Korea Energy and Economy Institute (KEEI).
                                
 Ahead of the Fed, traders will look to weekly U.S. inventory
data to see if gasoline stocks run even lower ahead of the
summer driving season and whether OPEC curbs hit crude stocks.
Analysts expect a 300,000 barrel rise in crude stocks but a
700,000 barrel decrease in gasoline, according to a Reuters poll
[EIA/S].
 (Additional reporting by Tom Miles in Hong Kong, Michael Taylor
in London and Eva Kuehnen in Frankfurt)