A look at the day ahead in markets from Julien Ponthus.
The deadline for European buyers of Russian gas to start paying in roubles and the release of that number one U.S. economic indicator, the non-farm payrolls report, means it won't be a quiet end to the week.
It is not clear which side has the most to lose if existing gas contracts are halted but Germany, the most heavily reliant on Russian gas, has already activated an emergency plan that could lead to rationing in Europe's biggest economy.
For their part, oil prices are easing off after U.S. President Joe Biden this week announced a release of 1 million barrels per day for six months to tackle the sharp rise in energy prices which followed Russia's invasion of Ukraine.
The gas showdown comes amid warnings that the euro zone could be heading towards a recession as confidence drops among consumers and businesses, while inflation numbers this week from the like of France, Germany and Italy showed a historic surge building up across the bloc.
Flash euro zone inflation data is out later this session with some analysts saying the headline number could top 7%.
And talking about recession fears, the two-year/10-year part of the U.S. Treasury yield curve inverted briefly again overnight.
Whether this correctly predicts a recession within two years remains to be seen but there are plenty of factors jeopardising the post-lockdown recovery, from strained supply chains to the resurgent pandemic.
On that front, China's factory activity slumped at the fastest pace in two years in March due to a local COVID-19 resurgence.
The risk of a monetary policy accident is also on investors' mind. Some pundits worry that the European Central Bank is doing too little to tame inflation.
Money markets see the ECB exiting negative rates by year-end and in the meantime, the portion of euro zone debt carrying a negative yield is shrinking fast.
As far as the Federal Reserve is concerned, the eagerly awaited U.S. March jobs data later on could help gauge the pace at which monetary tightening can be conducted without rocking the recovery boat.
Key developments that should provide more direction to markets on Friday:
- China March factory activity contracts at sharpest rate in 2 years
-Indonesia's March inflation at 2-year high
-Japan business mood sours as Ukraine war
- Flash euro zone HICP inflation due
- EU officials Ursula von der Leyen and Charles Michel hold a virtual summit with Chinese President Xi Jinping.
- U.S. non-farm payrolls/ISM new orders
Graphic: Euro zone negative-yielding debt pool shrinking fast - https://graphics.reuters.com/EUROPE-MARKETS/zjpqkjzaopx/chart.png