MORNING BID-Relentless

A look at the day ahead in European and global markets from Tom Westbrook

Not yet the end of the first trading week of the year and festivity is giving way to familiar tension.

Ukraine has rejected Russia's order for a ceasefire over Orthodox Christmas as a trick. No compromise is forthcoming, either, on Capitol Hill, with 11 failed attempts at installing Kevin McCarthy as House speaker underscoring dysfunction there.

The Fed is at loggerheads with markets betting on rate cuts by the end of the year, and Asia's bullishness about a recovery in China is increasingly at odds with global sentiment.

The MSCI Asia ex-Japan index .MIAPJ0000PUS hit a four-month high on Friday, while Wall Street indexes test recent lows. The dollar is refusing to fall.

European inflation data on Friday can set the stage for U.S. jobs data due later in the day as the figures can offer the latest state-of-play for consumer prices and the economy.

A bigger-than-expected drop in the speed of German consumer price rises unleashed a bond rally across Europe earlier this week. But only small declines are forecast.

The U.S. economy likely maintained a solid pace of job and wage growth in December, and that could again stymie bets that an end to rate rises is coming anytime soon.

Key developments that could influence markets on Friday:

- U.S. -farm payrolls (December)

- Fed's Cook, Bostic, Barkin and George all speak

- Euro zone flash inflation (December)

(Reporting by Tom Westbrook; Editing by Jacqueline Wong)

((tom.westbrook@tr.com; +65 6973 8284;))