GLOBAL MARKETS-Stocks edge up on Fed cut bets; euro firm ahead of ECB decision

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Swiss National Bank cuts rates; European Central Bank decision due

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Yen weakens on Reuters report BOJ may skip hike next week

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Yuan stabilises after PBOC keeps official midpoint steady

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Crude extends gains amid threat of more Russia sanctions

By Amanda Cooper

LONDON, Dec 12 (Reuters) - Stocks nudged up on Thursday and the euro rose ahead of a European Central Bank monetary policy decision, while investor sentiment was supported by U.S. consumer inflation data that cemented bets for a Federal Reserve interest rate cut next week.

In a busy day for central bank decisions, the Swiss franc weakened after the Swiss National Bank cut rates by half a point, its largest reduction in nearly 10 years, which hit the franc. Markets had priced a good chance of a half-point cut in the run-up to Thursday's meeting.

The dollar eased against a range other currencies, as investors took profit on some of the market's strength ahead of Wednesday's inflation reading, which showed the consumer price index (CPI) rose exactly in line with expectations in November.

Europe's STOXX 600 edged into positive territory, while Swiss stocks rallied sharply following the SNB's rate cut. U.S. stock index futures were down 0.1-0.2%

Overnight, the tech-focused Nasdaq shot up 1.8% to close above 20,000 for the first time, while the S&P 500 climbed 0.8%.

"The U.S. CPI print lit a flame in U.S. equity," said Chris Weston, head of research at Pepperstone.

"The market has essentially seen one of the last remaining obstacles that could derail sentiment out of the way", he said, "seeing the coast somewhat clearer for the illustrious seasonal chase of returns to play out into year-end."

Traders now place a 97% chance on a quarter-point Fed cut on Dec. 18.

Higher U.S. Treasury yields prevented the dollar from straying too far below two-week highs, after data showed an increase in the U.S. budget deficit.

Ten-year Treasury yields rose on Thursday by 2 bps to 4.291%, set for a rise of nearly 14 bps this week, their largest weekly increase since late October.

CENTRAL BANK FOCUS

The dollar reversed early losses against the Japanese yen to hold steady at 152.46 after Reuters reported that BOJ policy makers were inclined to forgo a hike on Dec. 19 and wait for more data on wages at the start of next year.

The Australian dollar surged on unexpectedly strong employment data, rebounding from Wednesday's weakness following a Reuters report that Beijing is considering allowing the yuan to depreciate further next year. China is Australia's top trading partner and the Aussie is often used as a liquid proxy for the yuan.

The yuan held its ground above a one-week low after the central bank kept the official midpoint for the currency stable, to last trade at 7.268, leaving the dollar down 0.18% in offshore trading.

The Swiss franc was last down 0.5% at 0.888 to the dollar, following the SNB decision. Against the euro , the franc was down nearly 0.7% at 0.9339.

"Cutting the policy rate by 50 basis points is the right decision, as inflation risks are on the downside and the economy is growing below potential, while Switzerland's main export are struggling with structural and cyclical problems," Karsten Junius, chief economist at J Safra Sarasin, said.

The euro ticked up 0.2% to $1.0509 after dipping to a one-week trough overnight. The ECB is widely expected to cut euro zone rates by 25 basis points later in the day.

Traders will focus on what central bank President Christine Lagarde signals about the outlook for growth and inflation in the months to come, given the political instability in France and Germany right now, as well as the risk of tariffs from the incoming U.S. administration led by Donald Trump.

Gold briefly traded at a more than one-month high, driven by the prospect of more rate cuts from the Fed and lower bond yields. It was last steady at $2,717.25 an ounce, having earlier risen to $2,725.79 for the first time since Nov. 6.

Crude oil extended its rally this week, lifted by the threat of additional sanctions aimed at stifling Russian oil output.

Brent crude futures rose 0.35% to $73.77 a barrel, while U.S. crude futures were up 0.3% at $70.50.

(Additional reporting by Kevin Buckland in Tokyo; Editing by Edwina Gibbs, Michael Perry and Angus MacSwan)