* Nikkei futures slide, S&P futures extend fall

* Brent crude up 59% in March, biggest monthly rise ever

* Gulf peace talks uncertain as US builds up troops

By Wayne Cole

SYDNEY, March 30 (Reuters) - Stock futures slid in Asia

on Monday as investors dug in for a protracted Gulf conflict

that already has oil prices heading for a record monthly rise,

bringing a spike in inflation and the risk of recession to much

of the globe.

Pakistan said on Sunday it was preparing to host "meaningful

talks" to end the conflict over Iran in coming days even though

Tehran earlier accused Washington of preparing a land assault as

the U.S. military sends more troops to the region.

Yemen's Iran-aligned Houthis also launched their first

attacks on Israel since the start of the conflict.

"Iran's control of the Strait of Hormuz, capacity to disrupt

global energy and food markets, and sustained missile and drone

capabilities give it little incentive to concede, pressuring the

U.S. to escalate," said Madison Cartwright, senior geo-economics

analyst at CBA.

"We expect the war to run at least into June, with the risk

tilted to a longer conflict."

The clampdown on the Strait has sent prices for oil, gas,

fertiliser, plastic and aluminium surging, along with fuel for

planes and shipping. Prices for food, pharmaceuticals and

petrochemical products are all set to rise.

That is bad news for Asia, as much of the region is highly

dependent on energy from the Middle East. Futures for Japan's

Nikkei were trading down at 50,870, pointing to a steep

fall from Friday's close of 53,373.

S&P 500 futures lost another 0.6%, while Nasdaq

futures fell 0.7%.

Brent crude rose 2.4% to $115.33 a barrel, bringing

its gains for the month to 59% and topping the jump that

followed Iraq's invasion of Kuwait in 1990. U.S. crude

climbed 3.0% to $102.52, making a monthly rise of 53%.

"The longer the Strait remains closed, the sharper the

drawdown in buffer supplies that could spark dramatic increases

in the price of crude oil, natural gas and other commodities,"

warned Bruce Kasman, global head of economics at JPMorgan.

"A scenario in which the Strait remains closed for an

additional month would be consistent with oil prices rising

towards $150/bbl and constraints on industrial consumers of

energy supply."

FED IN FOCUS AS PAYROLLS LOOM

The inflationary threat has led investors to revise up the

outlook for interest rates almost everywhere. Markets now imply

12 basis points of tightening by the Federal Reserve this year,

compared with 50 basis points of cuts a month ago.

Fed Chair Jerome Powell will have a chance to air his own

views at an event later on Monday, and the influential head of

the New York Fed, John Williams, is also talking.

Data on U.S. retail sales, manufacturing and payrolls this

week will provide an update on how the economy is travelling.

Jobs are seen rising 55,000 in March, after February's shock

92,000 drop, keeping unemployment at 4.4%.

In the European Union, figures on Tuesday are forecast to

show annual inflation leaped to 2.7% in March, from 1.9% the

month before, though core prices should be steadier.

The coming energy shock, combined with pressure on fiscal

budgets from higher borrowing costs and the need for more

defence spending, has slugged sovereign bond markets.

Ten-year U.S. Treasury yields are up roughly

47 basis points for the month so far at 4.428%, while two-year

yields have climbed 54 basis points.

Heightened volatility in markets has tended to benefit the

U.S. dollar as the world's most liquid currency. The United

States is also a net energy exporter, giving it a relative

advantage over Europe and much of Asia.

The dollar was trading a touch firmer early on Monday at

160.42 yen, having last week crossed the 160 barrier

for the first time since July 2024 when Japan last intervened to

prop up the currency.

The euro was stuck at $1.1492, not far from the

March trough of $1.1409.

In commodity markets, gold was little changed at $4,487 an

ounce, having drawn scant support as a safe haven or as a

hedge against inflation risks.