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)