A look at the day ahead in European and global markets from

Stella Qiu

Investors betting on TACO seemed to get what they wanted.

After Nasdaq officially slumped into correction territory

overnight, President Donald Trump announced he was delaying his

planned attacks on Iranian power stations by another 10 days.

Yet, the price reaction has not been as totally awe

inspiring as he would have hoped for. Brent crude futures

slipped less than 1% to $107.24 a barrel, hardly

unwinding an almost 6% surge overnight. Wall Street futures have

bounced by 0.4%, but that pales in comparison with the rally on

Tuesday when Trump first delayed his initial 48-hour deadline to

five days.

Europe's EUROSTOXX 50 futures rose 0.5%, while

Treasuries and the dollar are mostly flat.

It could be investors are growing numb to Trump's verbal

reassurances. Many reckoned by extending the deadline twice, he

is merely kicking the can down the road, which in itself

suggests the four-week-old war is not ending anytime soon.

Adding to the jitters were reports that another 10,000 U.S.

troops might be heading to the Middle East, fanning fears of an

imminent ground conflict. There is a real risk of mission creep

dragging the U.S. into a full-fledged war, yet with no certainty

the Strait of Hormuz could be reopened anytime soon.

All of that made for cautious trading into the weekend.

MSCI's broadest index of Asia-Pacific shares outside Japan

is down 2.4% for the week and over 11% from its

peak in late February. Japan's Nikkei was similarly down

10% from its February top. South Korea's KOSPI shed

1.5%, bringing its weekly loss to a steep 7%.

Meanwhile, central banks are warning of raising rates for

the worst possible reason, fighting a 1970s-style stagflation

threat. Norway's Norges Bank raised eyebrows with a spectacular

U-turn on Thursday, flagging rate hikes this year after

previously forecasting three cuts by 2028.

At the Fed, Governor Michael Barr and Vice Chair Philip

Jeffers both sounded concerned about sticky inflation. A trio of

their colleagues will get to speak later today, and markets will

be listening for any more hawkish views.

Stakes will be high given the seismic shift in market

pricing lately, with a rate hike in September about 50% priced

in. Fed officials were projecting a rate cut this year.

Key developments that could influence markets on Friday:

-- Developments in the Middle East conflict

-- The UK publishes retail sales for February

-- Fed officials Thomas Barkin, Anna Paulson and Mary Daly

speak

(Editing by Sam Holmes)