A look at the day ahead in European and global markets from Stella Qiu

Whatever Friday's U.S. payrolls report says, it's going to move things.

Such is the power that the August non-farm payrolls data holds over the markets, after Federal Reserve Chair Jerome Powell bluntly stated policymakers did not want to see any further weakening in the labour market, laying the ground for imminent rate cuts.

Analysts are looking for new jobs to rise by 160,000 and for the unemployment rate to dip to 4.2%. But a recent run of softer partials suggests risks are to the downside, fuelling speculation of an outsized half-point rate cut on Sept. 18.

As things stand now, futures are implying a 40% chance of a cut of 50 basis points, and a weak report would likely double that probability while shoving bond yields sharply lower.

Equally, an in-line or stronger-than-expected outcome would likely snuff out the chance for 50bp, slamming bonds, although 25bp does seem done and dusted whatever the figure.

For equities, there's the wrinkle of a possible recession. A weak report might make an outsized rate move more likely but would also stoke recession fears, and it's not clear which would win out in market sentiment.

There is also a lot at stake for the Japanese yen. A weak report could push it through key resistance at 141.66 per dollar and to its highest so far this year, while strong numbers would likely wipe out this week's 2% rally.

Oil is staring down its worst week in more than a year, after bullish news on U.S. inventories failed to inspire gains in a market that seems more fixated on economic worries. Brent crude could really use a strong payrolls report to avert falling below $70 a barrel.

Trade on Friday brought only small moves in Asian shares all around, although Taiwan outperformed with a rise of 1%. Bonds held onto their gains in the week so far and the dollar nursed losses.

Nasdaq futures slipped 0.5%, while Europe looks set for a subdued open with EUROSTOXX 50 futures up 0.1% and FTSE futures down 0.1%.

While payrolls will dominate the markets' attention, investors may also look for clues on the U.S. rates outlook from two prominent Fed officials, Governor Christopher Waller and New York Fed President John Williams, who will be speaking later in the day.

In any case, it will likely be a day that seals the fate of a possible 50 bp cut by the Fed.

Key developments that could influence markets on Friday:

-- Germany industrial output for July, Germany trade data

-- Eurozone revised GDP data for Q2

-- U.S. non farm payrolls for August

-- Fed Governor Christopher Waller, Fed New York President John Williams speak

(By Stella Qiu; Editing by Edmund Klamann)