MORNING BID EUROPE-Middle East tensions spook markets

A look at the day ahead in European and global markets from Rae Wee European stocks are in for a rocky start on Friday with futures pointing to the sharpest daily percentage fall in months, rattled by escalating tensions in the Middle East. Israeli Prime Minister Benjamin Netanyahu's comments that the country would harm "whoever harms us or plans to harm us" stoked fears of a wider war.

A look at the day ahead in European and global markets from Rae Wee European stocks are in for a rocky start on Friday with futures pointing to the sharpest daily percentage fall in months, rattled by escalating tensions in the Middle East.

Israeli Prime Minister Benjamin Netanyahu's comments that the country would harm "whoever harms us or plans to harm us" stoked fears of a wider war. Israel is bracing for the possibility of a retaliatory attack for Monday's presumed Israeli air strike on Iran's embassy. That took the shine off Wall Street's stellar run in a late fall on Thursday, which left Asian shares a sea of red and sent oil prices jumping.

Europe's unlikely to be spared too, with the EURO STOXX 50 index futures already down more than 1.5% - a large move for Asian time. Britain's FTSE futures likewise fell more than 1.4%.

The risk of a prolonged Israel-Hamas war - once overshadowed by the global rate cut cheer - has come back to the fore. That's proving to be a wild card for central bankers just as markets reassess their expectations of Federal Reserve rate cuts this year. Minneapolis Fed President Neel Kashkari, a known hawk, went as far as to say that rate cuts may not even be needed at all this year if the progress on inflation continues to stall.

Brent futures above $90 a barrel probably aren't helping the case for easing either. All this comes ahead of a key U.S. jobs report due later on Friday that could make or break the case for a first Fed rate cut in June, which seems to have turned into a cat-and-mouse game.

Surprise growth in U.S. manufacturing at the start of the week helped propel the dollar to an over four-month high as traders pared bets of an imminent Fed easing cycle, only to backtrack after a downbeat U.S. services sector survey released days later. Expectations for Friday's data are for nonfarm payrolls to have increased 200,000 jobs in March, along with tentative signs that labour market conditions in the world's largest economy are easing, albeit at a moderate pace.

Key developments that could influence markets on Friday: - Euro zone retail sales (February)

- Germany import prices (February) - Reopening of 1-month, 3-month and 6-month UK government debt auctions

- U.S. nonfarm payrolls (March) (Editing by Sam Holmes.)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)