Asian shares frozen by Fed, ECB uncertainty SYDNEY (Reuters) - Asian stock markets were treading water on Wednesday after upbeat U.S. data fanned speculation the Federal Reserve could start slowing its asset buying as early as next month -- depressing bond prices and lifting the dollar. The air of caution was clear in MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS which ticked down 0.2 percent. Australia's main index dipped 0.3 percent .AXJO while the Nikkei .N225 eased 0.2 percent. Mirroring the modest moves across the region, shares in Shanghai .SSEC lost 0.2 percent. Wall Street had turned lower on Tuesday after the Institute for Supply Management's October read on the U.S. services sector came in at a surprisingly strong 55.4. It also included a notable jump in the employment outlook which could lessen the chance of a very weak payrolls number on Friday. <TOP/CEN> While evidence of economic resilience should be welcome, it also adds to the case for the Fed to wind back its bond buying program relatively soon. Most analysts still favor March as the window for a move, but a shift in December is a growing risk. That pressured Treasury prices and lifted yields on 10-year notes 5 basis points to 2.66 percent, while markedly widening the gap between long and short-term rates. Equity investors reacted with caution, leaving the Dow Jones industrial average .DJI down 0.13 percent on Tuesday, while the S&P 500 Index .SPX eased 0.28 percent. The contrast with the euro zone was stark as a string of disappointing economic numbers piled pressure on the European Central Bank (ECB) to take action, if not at its policy meeting on Thursday, then certainly by December. "We expect the ECB to soon make clear its intentions regarding arresting deflation concerns," analysts at Barclays Capital wrote in a note to clients. We anticipate a looser monetary stance to be adopted at the December meeting, but the ECB's intentions to be aired ahead of it. The underperformance of the euro zone was highlighted by an upbeat survey of UK services which led to speculation the Bank of England would lift its growth forecasts and boosted the pound to a one-month peak on the euro. The common currency has now shed 2 percent on the pound since data last week showed a shock slowdown in inflation across the region. The euro in turn faded to $1.3469, from a $1.3522 peak on Tuesday, while the U.S. dollar pushed up to 98.50 yen, from Tuesday's low of 98.16. The dollar index last traded at 80.707.DXY, back within striking distance of a near two-month peak of 80.930 set on Monday. New Zealand added to the run of better global economic news as employment jumped well past forecasts in the three months to September, while the jobless rate dropped to 6.2 percent. The robust report prompted investors to bring forward expectations for when interest rates might rise in New Zealand to early next year. It is already likely to be the first of any developed nation to tighten policy this cycle. The country's dollar climbed a quarter of a U.S. cent on the news to $0.8361. But the chatter about Fed tapering also stirred fears that some emerging markets could see another bout of capital flight. It was notable that share markets in Latin America suffered more than most on Tuesday, with Brazil .BVSP and Mexico .MXX losing over 1 percent each. In commodity markets, gold was stuck at $1,310.31, having slipped for seven straight sessions, while copper rose 0.2 percent. Growing U.S. supplies continued to pressure oil prices, with U.S. crude ending Tuesday at a five month low <O/R>. Early Wednesday, U.S. crude futures had eked out a bounce of 42 cents to $93.79 per barrel. Brent crude regained 35 cents to $105.68 a barrel. Editing by Shri Navaratnam and Eric Meijer