MORNING BID-Everyone stop, it's payrolls Friday

A look at the day ahead from Tommy Wilkes.

All important U.S. non-farm payrolls data is the main event for markets on Friday, as investors look for more evidence about how the economic recovery is boosting employment -- and potentially inflation.

Stock markets headed lower at the end of the week as traders worried better-than-expected employment data overnight raised expectations for a strong reading for the May nonfarm payrolls report, while a measure of service sector activity climbed to a record high.

The consensus forecast for the data, due at 1230 GMT, is for about 650,000 jobs to have been added in May, though the "whisper number" among traders is closer to 800,000.

While data globally points to a stronger economic recovery than anticipated earlier this year, the concern is that the speed of the rebound will prompt the Federal Reserve and other central banks to begin tapering asset purchases, depriving markets of the incredibly easy money conditions they have come to expect.

New York Fed President John Williams said on Thursday that the U.S. economy is still far from the point at which policymakers might begin to withdraw support, although it makes sense for officials to begin discussing their options.

Fed Chair Jerome Powell speaks on central banks and climate change at a conference on Friday.

The dollar was perched at multi-week highs, while stock markets were lower but close to record highs. U.S shares were given some support by reports that President Joe Biden was willing to compromise over a proposed corporate tax hike.

Finance ministers of the G7 countries meet in London, their first face-to-face meeting since the COVID-19 pandemic and a crucial test for international cooperation on such thorny issues as taxing multinational companies.

Oil prices look set to continue to take centre stage as they hold above $70 a barrel, after touching their highest since May 2019 on Thursday.

Energy is a key barometer of the strength of the post-pandemic recovery and, when set against the lows of last year, oil prices suggest demand is returning fast.

Elsewhere, it was a quiet day for corporate results with most companies having reported their earnings for the quarter.

Key developments that should provide more direction to markets on Friday:

-Euro zone retail sales

-U.S. non farm payrolls/durable goods

-Federal Reserve Chairman Jerome Powell 1100 GMT

-Finance ministers from across the G7 nations until Saturday

(Editing by Dhara Ranasinghe)