March 30 (Reuters) - A look at the day ahead in European

and global markets from Wayne Cole.

It's been a sea of red in Asian stock markets as Brent

cleared $115 right from the off. It's now up roughly 59% in

March, which would be the biggest month on record. Bigger even

than when Iraq invaded Kuwait in 1990.

The headlines have not been helpful, with Pakistan trying to

host peace talks but would-be U.S. and Iranian guests seemingly

reluctant to RSVP. Attacks have continued across the Gulf and

widened to the south as Yemen's Houthis launched strikes on

Israel.

That was a worrying development as the Houthis could try to

restrict shipping through the Bab el-Mandeb in the Red Sea,

which is the other major choke point in the Middle East oil

trade alongside the Strait of Hormuz.

As for the Strait, President Trump told the Financial Times

that Iran had agreed to let through another 20 "big boats",

presumably tankers, as a concession. That would also seem to be

a tacit recognition that Iran controls the Strait.

Then again, Trump also said he wants to "take the oil in

Iran" and might use U.S. forces to seize Kharg Island in the

Persian Gulf, Iran's main oil exporting terminal.

He went on to say that talks with Iran were going on

directly and indirectly, were going extremely well and could

reach a deal soon, or might not.

Meanwhile, the U.S. build-up goes on, with various reports

that more than 50,000 troops are in the region including more

special forces.

All of which suggests the conflict could run for some time

yet and the risks lean toward escalation, dealing more damage

down the supply chain and lengthening the time for it to return

to anything like normal once, if, the Strait re-opens. That is

one reason why Brent futures are above $100 out to July, and

December is up at $85 a barrel.

That's bad news for inflation and will show up starkly in

March German preliminary CPI due later Monday, and EU CPI on

Tuesday. The hawks at the ECB are already clawing for a rate

hike, and markets imply a 58% chance of an April move.

Futures have given up on a Fed easing this year, which Fed

Chair Powell may have something to say about at a Harvard event

later today. It will also be front of mind for Kevin Warsh, the

proposed replacement for Powell, with the Senate Banking

Committee planning to hold a hearing on Warsh's nomination as

soon as the week of April 13.

Key developments that could influence markets on Monday:

- German preliminary CPI for March

- EU economic confidence for March

- Dallas Fed March survey

- Federal Reserve Board Chair Jerome Powell participates in

a moderated discussion. Fed Bank of New York President John

Williams in conversation

- G7 finance and energy ministers, as well as central

bankers, will meet virtually