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Wall St muted after Europe, Asia gain

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US earnings kick off with strong showing from banks

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Asian stocks boosted by tech, Europe by luxury, chipmakers

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Yen rises on growing rate hike wagers

(Updates prices to early afternoon)

By Sinéad Carew and Alun John

NEW YORK/LONDON, Jan 16 (Reuters) - MSCI's global

equities gauge rose on Thursday, while Wall Street stocks were

choppy and U.S. Treasury yields fell in response to a mixed bag

of economic data and Federal Reserve commentary about interest

rate cuts.

Wall Street surged on Wednesday after data showed easing in

U.S. core inflation. While Thursday's data included a U.S.

retail sales increase in December, it was below expectations.

Meanwhile, the number of Americans filing new applications

for unemployment benefits increased more than expected last week

but remained at levels consistent with a healthy labor market.

U.S. Treasury yields slipped in a choppy market, with

investors reacting to Federal Governor Christopher Waller saying

three or four interest cuts this year are still possible if U.S.

economic data weakens further.

"Our base case is still two cuts this year and that's

predicated on the notion that we will get some slowing

inflation," said Robert Tipp, chief investment strategist and

head of global bonds at PGIM Fixed Income in New York.

With Donald Trump due to be inaugurated on Jan. 20,

investors were closely monitoring U.S. Senate Finance Committee

testimony from Scott Bessent, the president-elect's nominee to

lead the Treasury Department.

Bessent said extending Trump's 2017 tax cuts was a top

priority. This was after he said in prepared remarks that the

U.S. must prioritize investing to grow the economy over

"wasteful spending that drives inflation."

While investors have been hoping for fewer regulations under

Trump they have been dealing with the uncertainty of whether

his tariff policies would push inflation higher.

On Wall Street, stocks flitted between green and red a day

after its three major indexes registered their biggest daily

percentage gains since the Nov. 6 rally following the U.S.

presidential election.

At 12:04 p.m. the Dow Jones Industrial Average rose

35.73 points, or 0.08%, to 43,256.26, the S&P 500 rose

6.92 points, or 0.12%, to 5,956.91 and the Nasdaq Composite

fell 46.36 points, or 0.24%, to 19,464.88.

MSCI's gauge of stocks across the globe rose

3.22 points, or 0.38%, to 850.52.

Europe's STOXX 600 index rose 0.98%, with luxury

stocks boosted after Cartier jewellery owner

Richemont's results exceeded analyst expectations.

And chip stocks around the world were supported after Asian

chipmaker Taiwan Semiconductor Manufacturing Co ( TSM )

reported a record quarterly profit in line with expectations.

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

had closed up 1.29%, while Japan's Nikkei

rose 0.33%.

In currencies, the dollar index, which measures the

greenback against a basket of currencies including the yen and

the euro, fell 0.07% to 108.95.

The euro was up 0.12% at $1.0301.

Against the Japanese yen, the dollar weakened 0.68%

to 155.4 after comments from Governor Kazuo Ueda prompted

traders to price in a more than 70% chance the Bank of Japan

will raise interest rates next week.

In bonds, the yield on benchmark U.S. 10-year notes

fell 3.6 basis points to 4.617%, from 4.653% late on

Wednesday while the 30-year bond yield fell 2.7

basis points to 4.8514%.

The 2-year note yield, which typically moves in

step with expectations for Fed interest rate policy, fell 2.1

basis points to 4.243%, from 4.264% late on Wednesday.

In commodities, oil prices slipped with Yemen's Houthi

militia expected to halt attacks on ships in the Red Sea, while

investors digested the complex ceasefire accord between Israel

and militant group Hamas.

U.S. crude fell 2.06% to $78.39 a barrel and Brent

fell to $80.81 per barrel, down 1.49% on the day.

And U.S. natural gas futures held near a two-year high on

colder weather forecasts for the Martin Luther King Jr. Day

holiday weekend, which could cut output by freezing gas wells

and pipes even as demand for heating fuel rises to a record

high.

Spot gold rose 0.93% to $2,720.89 an ounce. U.S. gold

futures rose 0.77% to $2,733.50 an ounce.