A look at the day ahead in European and global markets from Ankur Banerjee

Another set of weaker-than-expected U.S. economic data has investors spooked at the prospect of a looming recession, crimping risk appetite as traders hunker down and wait for the always-important non-farm payrolls data on Friday.

Asian stocks sagged, while the dollar was on the front foot as investors kept their risk-off hat ahead of the long weekend. Oil prices eased after the shock at the start of the week from OPEC+ to cut production.

Futures hint at a muted open in Europe, with the pan-European STOXX 600 index aiming to break its losing streak this week. European equities had a stellar start to the year but the March madness due to the banking turmoil has weighed.

The string of weak U.S. economic data this week has emboldened bets that the Fed may just be ready to pause its tightening policy, with markets still pricing more than 50% chance of the central bank standing pat when it next meets in May.

Data from China served as a bit of a bright spot, with March services activity in the country revving up at the quickest pace in 2-1/2 years on robust new orders and job creation and a consumption-led post-COVID recovery.

There are concerns though that the recovery in China may not last long in the face of geopolitical tensions as well as financial worries outside the country.

Meanwhile, UBS executives sought to assure investors on Wednesday that Switzerland's largest bank can make its shotgun takeover of Swiss rival Credit Suisse work.

In corporate news, FedEx will consolidate its separate delivery companies into a single entity as it looks to cut costs and better compete with United Parcel Service and Amazon.

Canada's TD Bank Group is the most shorted banking stock globally, data provider ORTEX's calculations showed, with hedge fund bets against the company at $4.2 billion. Analysts are concerned about the bank's exposure to U.S. regional lenders.

Key developments that could influence markets on Thursday:

Economic events: UK all sector PMI for March; S&P Global Cons PMI for the Eurozone, Germany and France; UK Halifax house prices for March

(Reporting by Ankur Banerjee in Singapore; Editing by Christopher Cushing)