* Risky assets recover from earlier selloff in Asia hours
* Oil near one-month high, dollar now up on the day
* Mining sector weighs on European stocks
* Risk-off sentiment over week sees big bond fund inflows
* US NFP data expected to show slowing, but still solid
By Vikram Subhedar
LONDON, April 7 Oil prices held near one-month
highs on Friday after the United States attacked a Syrian air
base but stocks and the dollar recovered early falls when a U.S.
official played down the risks of an escalation.
The U.S. dollar recouped all of its losses against a basket
of major currencies and was last trading little changed.
S&P 500 futures were flat.
European stocks fell 0.2 percent weighed down by
weakness in mining stocks as investors locked in some profits
following the sector's stellar run this year.
The United States fired dozens of cruise missiles at a
Syrian air base from which it said a chemical weapons attack was
launched this week, an escalation of the U.S. military role in
Syria that swiftly drew sharp criticism from Russia.
A U.S. defence official told Reuters the missile strike was
a "one-off", helping to calm market nerves.
"The U.S. missile strike on a Syrian air base overnight
caused a knee-jerk shift into safe havens, although the impact
was moderate as it is being interpreted as a one-off
proportionate response," said Ian Williams, a strategist at Peel
Hunt in London.
Oil prices hovered near one-month highs though prices pared
some gains as there seemed no immediate threat to supplies.
Brent crude futures which surged more than 2 percent
after the U.S. attack were last up 1.5 percent at $55.72 a
barrel. U.S. West Texas Intermediate (WTI) crude futures
were up 1.6 percent.
The strength in crude oil lifted shares on major oil and gas
producers in European with BP, Royal Dutch Shell
and Total all up about 0.5 percent.
Focus was also shifting to U.S. payrolls later in the day
for further cues on the strength of the economy. Job growth
likely slowed in March after unseasonably mild weather boosted
hiring over the prior two months.
Non-farm payrolls probably increased by 180,000 jobs last
month, according to a Reuters survey of economists.
Elsewhere, euro zone finance ministers are due to meet with
a discussion on Greece's progress in implementing reforms needed
to unlock aid as part of the agenda.
While risky-assets were off their lows on the day, demand
for safe-haven assets such as gold remained intact.
Investors had already been on edge with talks poised to
begin between Donald Trump and Chinese leader Xi Jinping over
flashpoints such as North Korea and China's huge trade surplus
with the United States.
Investment flows underscored the broadly "risk-off" tone in
markets in recent sessions.
The latest data from Bank of America Merrill Lynch and fund
tracking firm EPFR showed investors pumped $12.4 billion into
bond funds over the past week while pulling $7.4 billion from
the equities, the largest outflow in 40 weeks.
Spot gold was up a percent while high-rated euro zone
government bonds edged lower.
The yield on Germany's 10-year government bonds
fell to a one-month low. Overnight, U.S. Treasury
yields dropped to their lowest level in over four months at 2.29
"Safe-haven flows are always affected by political events,
and when it affects countries where the U.S. and Russia are
interested, then investors become even more nervous because of
relations (between those two)," said DZ Bank strategist Daniel
"Especially now you also have talks between the U.S. and
China on North Korea," he added.
(Additional reporting by Abhinav Ramnarayan; Editing by Jeremy