UPDATE 2-Brazil cenbank stays cautious as policy shift sinks in

* Tombini says bank's new message has affected markets

* Reiterates central bank has been cautious with policy

* Bank to monitor economic outlook to make decisions

SAO PAULO, March 22 (Reuters) - Brazilian financial markets have already reacted strongly to a recent shift in the central bank's message, the bank's chief Alexandre Tombini said on Friday, signaling a rate hike may not be needed right away.

Tombini, in a speech to French and Brazilian businessmen, again stressed that future monetary policy decisions will hinge on upcoming macroeconomic data, buying the bank some time before it raises rates to curb high inflation.

"The adjustment in the central bank's message has triggered by itself a relevant change in financial conditions overall," Tombini said. "Actions were taken, but it is plausible to claim that others may be necessary. To decide this, the central bank will monitor the macroeconomic scenario."

Some economists interpreted his comments to mean that the bank is in no rush to raise rates from record lows as policymakers' more aggressive tone against inflation has already raised yields on interest rate futures contracts.

"Now that the bank has achieved the effect it wanted on the market, it might not be necessary to adopt short-term measures," said Mauro Schneider, chief economist with CGD Securities in Sao Paulo. "I think the main message here is caution."

Since Tombini first said he was uncomfortable with inflation in early February, yields on interest rate contracts due in January 2014 have risen more than 30 basis points to 7.76 percent.

Earlier in March, economists raised their forecast for interest rates by year-end for the first time in nearly four months, according to a weekly central bank survey.

A jump in interest rate futures tends to influence the rate banks charge their clients.

Naggingly high inflation has put pressure on the central bank to raise rates after an aggressive easing cycle that slashed 525 basis points off the Selic rate to a record low of 7.25 percent last year.

Tombini has tried to calm markets by toughening his message, reiterating that policymakers are ready to raise rates to tame prices in a country that struggled with hyperinflation only two decades ago.

The U.S.-trained economist sounded more optimistic about domestic activity, saying that the economy is picking up steam and likely expanded at an annualized rate of 4 percent in the first quarter.

CENTRAL BANK GETS A BREAK

Inflation rose slightly less than expected in the month to mid-March, increasing market bets that the bank will likely wait until May to hike interest rates.

The benchmark IPCA-15 price index rose 0.49 percent, accelerating to 6.43 percent in the 12 months to mid-March.

To prevent inflation from piercing the official ceiling of 6.5 percent, the central bank is expected to raise rates to 8.25 percent this year, according to more than 100 economists surveyed by the central bank last week.

However, any monetary tightening in Brazil will most likely be limited in scope, analysts from Standard and Chartered said in a research note on Thursday.

"In our view, the link between monetary policy and inflation in Brazil is weaker than in other Latin American economies; we do not anticipate significant central bank tightening," the bank said.

To read Tombini's speech click on: ()