* Global shares slightly fall after setting new highs
* Focus on next week's ECB policy meeting
* st euro steady again (Adds details, updates share prices))
By Atul Prakash
LONDON, May 30 Global shares edged lower after hitting new highs on Friday, with investors positioning cautiously on the last trading day of the month and ahead of expected changes to European Central Bank policy next week.
The MSCI world index, which tracks stocks in developed economies, fell 0.1 percent after scaling a new lifetime high as investors avoided decisive bets ahead of the ECB's June 5 policy meeting.
The euro zone central bank is expected to cut all its main interest rates and adopt other measures to avert the threat of deflation and spur growth in the 18-country currency bloc.
MSCI's all-country world index also fell 0.1 percent after rising to its highest level in more than six years, but was less than 2 percent below its lifetime high.
"Investors are cautious as there is some nervousness about the likely outcome of the ECB meeting," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels. "If we only get words, not backed up by deeds, markets will react very negatively.
"However, that is not our base scenario. In our minds, the ECB will have to inject a new round of liquidity, which will together with the economic recovery and decent profit growth, drive the next upward leg of the bull market in equities."
Five people familiar with the measures being prepared told Reuters this month that the ECB would cut rates, taking its deposit rate into negative territory for the first time, along with targeted measures to boost lending to smaller firms.
"The market will hold at current levels until the ECB meeting next week," said Christian Stocker, equity strategist at UniCredit in Munich. "Should the ECB disappoint the market, then I expect a negative reaction and equities will run into a consolidation that could hold in the summer months."
European stocks were broadly weaker, with the pan-European FTSEurofirst 300 index falling 0.1 percent.
It was led lower by BNP Paribas after a report said the U.S. Justice Department was pushing the French bank to pay more than $10 billion to resolve a criminal probe. BNP shares fell 4.6 percent.
Germany's DAX was flat, slightly outpacing the broader market after figures showed German year-on-year retail sales grew at the strongest rate in April since June 2012, partly because of a late Easter.
BONDS PRICES SOFTER
German bond prices fell, tracking a decline in U.S. Treasuries after Federal Reserve policymaker Esther George said rate rises should be steeper than many in the market expected.
The Fed is on target to phase out its quantitative easing bond-buying completely by the autumn but chief Janet Yellen has said rates will stay close to their current record lows for a considerable time afterwards, and will then rise only gradually.
"The market is pricing in a very benign interest rate cycle in the U.S. but whilst Yellen seems to be on the dovish front, George is signalling some members of the Fed are less dovish," RIA Capital Markets strategist Nick Stamenkovic said.
"The difference among policymakers should become marked once the Fed completes QE and that could start unnerving the market."
The euro was steady at $1.3608, not far off Thursday's three-month low of $1.3586. The dollar index, which tracks the currency against a basket of six major rivals, inched lower to 80.458.
On the commodities front, gold steadied after three days of losses, but stayed on track for its biggest weekly decline in two months after upbeat U.S. data and signs of softening demand in Asia pushed prices through key chart levels.
Brent crude oil was also little changed around $110 a barrel, near the top of its range over the last three months, underpinned by supply worries and evidence of strong oil demand in the United States, the world's top oil consumer. (Additional reporting by Emelia Sithole-Matarise; Editing by Catherine Evans)