May 1 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole.

Another day when investors in Asia feel slightly foolish for thinking things in the world were going badly, only for the U.S. to come in and buy stocks like drunken sailors. What do surging oil costs matter when tech earnings are so very, very bright.

Even old-economy Caterpillar got into the AI act as data center demand for its power equipment helped it blow past Street forecasts and added almost 10% to its share value.

Apple also beat estimates, though not by as much as in the past, leading analysts to call it a "solid" result. Which may be why its shares are up just 1.9% after hours.

Now, momentum is undoubtedly a powerful force in markets. Why is it going up? Because people are buying it. Why are they buying it? Because it's going up. But, as analysts at Goldman Sachs say, this is straying beyond momentum and into mania.

They note the recent rally on Wall Street has been one of the narrowest on record, reflecting the fact that earnings upgrades are also very narrow, driven almost entirely by semiconductors, IT and communications.

And it requires investors to ignore the impact of the worst shock to oil markets on record. Brent has come off its $126.41 peak, but that's mainly because the June contract rolled over into July. The latter's up around 1% to above $111.00 and there is no sign of the Strait of Hormuz opening anytime soon, with Iran and the U.S. seemingly content to just exchange verbal threats.

As supplies of petrol, diesel, jet fuel, bunker fuel, fertilisers and so on, get ever shorter, prices will have to rise to force demand down into balance.

Policymakers know this all too well, which is why four major central banks this week warned of inflation risks ahead. The ECB and BoE both sounded like rates could rise as early as June, while the FOMC is in no mood for rate cuts no matter what Kevin Warsh - and his boss - might desire.

Incidentally, high oil prices also make it harder for Japan to succeed in its latest bout of currency intervention, given the country's trade deficit is going to explode in coming months.

While MOF/BOJ selling did initially manage to get the dollar down five big figures to 155.50, it's now above 157.00 as the market tests Tokyo's determination. Defending 160.00 is likely going to involve dumping a lot more dollars, and what will the U.S. Treasury and Trump think of that?

Key developments that could influence markets on Friday:

- Bank of England Chief Economist Huw Pill gives a presentation on the central bank's latest interest rate decision

- ISM manufacturing survey for April

(By Wayne Cole; Editing by Muralikumar Anantharaman)