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GLOBAL MARKETS-U.S. data, ECB easing bets feed risk appetite

* Risk appetite up after S&P 500 marks new record high

* European shares, bonds tread water after gains of last few days

* Gold hits 3-1/2 month low as safe-haven appeal dims

* ECB lending data expected to bolster the case for rate cuts

LONDON, May 28 (Reuters) - Strong economic data in the United States shored up world stocks on Wednesday, with record highs for U.S. and German markets underpinning risk appetite and sending safe-haven gold to a 3-1/2 month low. European markets took a breather in early trading after a strong last two days and as they digested new credit and bank lending figures from the European Central Bank that further bolstered the case for rate cuts next week. German two-year bond yields, the most sensitive to ECB interest rate moves, hovered at a 6 1/2-month low, while the DAX in Frankfurt marginally outperformed London and Paris as it added a token two points to Tuesday's all-time high close. The ECB's lending data showed credit to firms fell 1.8 percent on an annual basis in April, less pronounced than the previous month but giving further evidence of the sluggish lending environment in the euro zone. Jan von Gerich, chief developed markets strategist for Nordea in Helsinki, said it added to the case for the central bank to cut its already record-low 0.25 percent base rate, but that markets may need bolder action to rally any further. "Unless they (ECB) significantly exceed expectations, the meeting is likely to be a trigger for core euro zone yields to rise," von Gerich said. "That is my main assumption. It has often been the case in the past... buy the rumour sell the fact." In the currency market, the euro and sterling were both under pressure from a stronger dollar at $1.3622 and $1.6767 respectively. China's yuan was the standout mover though as end of month trading compounded concerns about a property market-led economic slowdown in the country to leave it flirting with an 18-month low. "There is a lot of negative news around the property sector and that is hurting the currency and we may see more weakness unless there is more evidence of an economic turnaround," said a senior strategist at a European Bank in Hong Kong who requested anonymity.

GOLD SLIDES Riskier asset markets rose overnight after the United States reported an unexpected rise in durable goods orders in April and higher home prices for March. Services industries, which dominate the economy, grew at a rapid clip in May.

The sunny mood saw MSCI's broadest index of Asia-Pacific shares outside Japan scale a one-year high of 490.15. Tokyo's Nikkei ticked up 0.4 percent, while MSCI's 45-country world index shuffled towards an all-time high. "The bullish U.S. indicators have set the positive tone for investors, who are basically using this week to prepare for next week's ECB meeting," said Cho Byung-hyun, analyst at Tong Yang Securities in Seoul. The positive sentiment eroded the safe-haven appeal of gold, which extended sharp overnight losses and fell to a fresh 3-1/2 month low amid the strong U.S. economic data and a drop in imports by top consumer China. Spot gold slipped to a low of $1,260.74 an ounce, its weakest since Feb. 7. The dollar, which was also supported by a small rise in U.S. Treasury yields, held near an 8-week high against a basket of major currencies and fetched 101.93 yen, within striking distance of a two-week high of 102.145 hit on Tuesday. Brent crude rose 17 cents to $110.19 a barrel as the upbeat U.S. data brightened demand prospects from the world's largest economy, with geopolitical risk in Libya and Ukraine providing additional support. On Tuesday, hopes the weekend's Presidential election win for Petro Poroshenko would ease Ukraine's tensions with Russia suffered an early setback after heavy fighting left more than 50 dead, according to pro-Moscow rebel fighters.

(Additional reporting by Saikat Chatterjee in Hong Kong and Shinichi Saoshiro in Tokyo; Editing by John Stonestreet)