Portugal Colonial - Markets mixed as traders weigh rates outlook

While Europe enjoyed a firm session Tuesday, Wall Street was a little more tepid after surging in reaction to Friday's below-forecast US jobs data, which ramped up bets on a Federal Reserve interest rate cut.

With the next major economic release on inflation not until next week, and many big-ticket earnings releases out of the way, investors are keeping tabs on comments from central bankers, hoping for an idea about their plans.

"There was limited data on corporate earnings to worry the markets, with no unexpected surprises and a lack of major US economic data in the days ahead," said Kyle Rodda at Capital.com.

"Debate continues within markets and among policymakers about the appropriate level for interest rates."

Many have spent the year pushing back against market expectations for how many cuts will be enacted this year as inflation comes down, and with recent data suggesting that battle still has a long way to go, they are sticking to their guns.

The latest, Minneapolis Fed boss Neel Kashkari, said he thought borrowing costs would likely stay higher for some time so that officials could be sure prices were being brought under control and get inflation back to the two percent target.

"The most likely scenario is we sit here for an extended period of time," he said, according to Bloomberg News.

"If inflation starts to tick back down or we see some marked weakening in the labour market then that might cause us to cut back on interest rates."

But he added: "Or if we get convinced eventually that inflation is embedded or entrenched now at three percent and that we need to go higher, we would do that if we needed to."

However, he said, that bar was quite high.

The Dow and S&P 500 eked out small gains in New York, though the Nasdaq struggled.

Asian markets wobbled with Hong Kong falling for a second straight day after a 10-day winning streak, while Tokyo, Shanghai, Singapore, Wellington, Mumbai, Bangkok and Jakarta also retreated.

Sydney, Seoul, Taipei and Manila edged up.

London, Paris and Frankfurt opened on the front foot.

- Key figures around 0715 GMT -

Tokyo - Nikkei 225: DOWN 1.6 percent at 38,202.37 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 18,334.94

Shanghai - Composite: DOWN 0.6 percent at 3,128.48 (close)

London - FTSE 100: UP 0.4 percent at 8,348.50

Dollar/yen: UP at 155.32 yen from 154.68 yen on Tuesday

Euro/dollar: DOWN at $1.0745 from $1.0758

Pound/dollar: DOWN at $1.2487 from $1.2509

Euro/pound: UP at 86.05 from 85.98 pence

West Texas Intermediate: DOWN 0.9 percent at $77.71 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $82.43 per barrel

New York - Dow: UP 0.1 percent at 38,884.26 (close)

L.Torres--PC