(Reuters) - A look at the day ahead in Asian markets.

What comes down must go up.

And so it is with oil, whose rise on escalating fears over a deepening conflict in the Middle East is casting an increasingly dark shadow over world markets as the week draws to a close. 

Brent crude leaped more than 5% on Thursday for its biggest rise in a year, bringing the week-to-date gains to more than 8%. If oil holds steady on Friday, it will clock its biggest weekly rise since January last year. 

It's true that oil's rebound is coming from a low base and prices are back to where they were only a month ago, but world stocks and investors' risk appetite are beginning to feel the heat. 

The oil price is still around 10% lower than it was a year ago and has been negative on a year-on-year basis since July, a dynamic that has highlighted the mounting disinflationary pressures around the world.

But it was down nearly 30% year-on-year only a few weeks ago. If geopolitical tensions persist and oil continues to rise, investors may need to rethink their inflation outlooks. 

U.S. Treasury yields are rising and the yield curve is steepening, led by the long end, which suggests longer-term inflation worries may be creeping into investors' minds. 

For Asia, the tailwinds from China's stimulus bonanza last week appear to be fading in the face of growing headwinds from oil and risk aversion. 

Another notable consequence of escalating geopolitical tensions is the burst of safe-haven demand for the U.S. dollar. The dollar index on Thursday hit a six-week high, and is on track for its biggest weekly rise since April.

Put the two together - higher Treasury yields and a stronger dollar - and it's not a particularly attractive backdrop for Asian markets. Especially on a Friday, a day after the MSCI Asia ex-Japan index hit its highest level since January 2022.

The Asian economic calendar on Friday is fairly light, with consumer inflation from the Philippines, retail sales data from Singapore, services purchasing managers index and manufacturing PMI reports from India and Hong Kong, respectively, as the main releases.

Global events are likely to set the market tone on Friday.

Investors in Asia may also be of a mind to play it safe ahead of the U.S. non-farm payrolls report for September out of Washington on Friday morning. This and the October data will go a long way to determining the size of the expected interest rate cut in early November.

Rates futures market pricing is currently evenly split over a 25 or 50 basis point cut. 

Here are key developments that could provide more direction to Asian markets on Friday:

- Philippines inflation (September)

- India services PMI (September)

- Singapore retail sales (August)