* European indexes flat; Asia shares recoup post-Fed losses
* Euro hovers around 2-week low against the dollar
* German debt remains near 2-week high
* Fed speakers eyed for more clues to U.S. policy moves
(Recasts throughout with European market data, quotes)
By Simon Jessop
LONDON, March 21 World markets steadied on
Friday after a volatile run driven by speculation over shifts in
U.S. monetary policy, with stocks up slightly, Bunds flat and
the euro at a two-week low against the dollar.
But the U.S. Federal Reserve's plans look set to resume
centre stage later in the day as a number of its officials give
A bounce in most leading Asian and U.S. indexes overnight
helped the MSCI World Index trade up 0.1
That gain was matched in early deals by the euro zone's blue
chip Euro STOXX 50 index.
An escalation of U.S. sanctions against Russia over the
crisis in Crimea kept Europe's investors cautious, though the
index remained on course to snap a two-week losing streak and
chalk up its best weekly performance of the year.
The lack of major violence in the region in recent days has
helped a partial recovery in market sentiment, but the fresh
U.S. sanctions announced overnight and a weakening in the credit
outlook for Russia from ratings agency Fitch kept traders wary
about stocks with heavy sales there.
Russian stocks opened down 3 percent.
"There hasn't been any military escalation, so the impact of
the crisis on the overall European market is very small now, but
on a more granular view, it's best to avoid all the stocks
exposed to Russia, so it's a market for stock-pickers," a
Paris-based trader said.
An important index options expiry on Friday was also helping
support the market, given the heavy number of calls at the 3,100
point level, but traders said this could struggle to be
maintained into next week.
Fed Chair Janet Yellen's suggestion on Wednesday that the
first U.S. interest rate hike could come in the first half of
2015, earlier than many had expected, continued to support the
dollar against the euro, yen and Swiss franc
Two-year Treasury yields rose to their highest in
Those moves suggest markets will also pay close attention to
a quartet of Fed speakers later on Friday. St. Louis Fed
President James Bullard, Dallas Fed President Richard Fisher,
Minneapolis Fed President Narayana Kocherlakota and Fed Governor
Jeremy Stein are all due to talk.
Against a basket of major currencies, the dollar was trading
at 80.171, not far from a high of 80.354, a level not
seen since late February.
The euro eased to $1.3777, having plumbed a two-week
low of $1.3749. It was on track to post a 1.0 percent drop this
week and record its first weekly fall since late January.
Not helping the common currency, European Central Bank
Executive Board Member Sabine Lautenschlaeger said interest
rates would remain low or go even lower for an extended period.
The mixture of Fed wait-and-see and ECB hawkishness combined
to steady benchmark German debt futures around a
two-week high hit in the previous session.
In Asia, currency attention was again on China's yuan, which
extended recent losses. The currency has fallen more than 1.2
percent so far this week, putting it on track for its largest
weekly loss since 1992.
Government economists and advisers involved in internal
policy discussions told Reuters that the central bank chose to
widen the yuan's trading band since it was less risky than other
reform options while also offering a way to hedge against
further economic slowdown.
In commodity markets, gold added slightly to moves in the
Asian session to trade around $1,336.36 an ounce, but
remained on course to post its worst week since late November.
Brent crude was up 18 cents to $106.63 a barrel,
while U.S. crude for May delivery was down 4 cents to
$98.86 per barrel.
(Additional reporting by Wayne Cole; Editing by John