GLOBAL MARKETS-Shares, oil set for bumper weeks as payrolls near

* European stocks up for third week, best in 5 months for Asia

* Emerging markets recovering, Brazil leads with Rousseff reeling

* Oil prices set to end week with strong gains, dollar up

* Payrolls seen showing 190,000 jobs added, unemployment steady

By Marc Jones

LONDON, March 4 (Reuters) - The best week for Asian shares in five months and the second six percent weekly jump in a row in oil prices put global markets in a buoyant mood on Friday, ahead of closely-followed monthly U.S (Other OTC: UBGXF - news) . jobs data.

European shares and Wall Street were both headed for their third week of gains with the FTSEurofirst up 0.7 percent and futures prices predicting a 0.2-0.3 percent post-payrolls rise when trading gets underway in New York.

Solid (KOSDAQ: 050890.KQ - news) results for the world's largest advertiser WPP (Swiss: OXWPP.SW - news) had dovetailed with the latest tick-up in commodities markets and hopes for another shot of European Central Bank stimulus next week to put Europe on track for a 3.5 percent weekly rise.

Investors seem to have put recent worries about a potential global recession firmly behind them for the moment and the U.S. 'non-farm' payrolls numbers at 1330 GMT are expected to show the labour market in the world's largest economy ticking along nicely.

A Reuters poll of economists forecasts them to show 190,000 jobs were added last month and that the overall unemployment level staying at an eight-year low of 4.9 percent.

"We didn't believe the 'world is going to end' story, but the way the mood has changed in the last couple of weeks is just crazy," said Janus Capital (NYSE: JNS - news) portfolio manager and global research analyst Ryan Myerberg.

"Since the beginning of the year it has been like driving down the motorway where every couple of miles a tractor has overturned, whether that be China, oil, the banks, that you have to swerve around."

The dollar was grinding sideways as traders opted for caution over valour know a good payrolls number later will, as Myerberg at Janus expects, support the Federal Reserve's case to increase U.S. rates again later in the year.

The greenback was flat against a basket of major currencies as the euro nudged back to $1.0970 just above where it started the week and the yen steadied at 113.74.

Traders also locked in some profits on sterling having seen it bounce back almost 2 percent this week from last month's 5 percent 'Brexit' battering.

In the bond markets, investors were also beginning to head to the sidelines.

U.S. Treasuries were flat in both the 2- and 10- year space, German Bund yields bobbed up marginally and Portugal's yields ticked higher ahead of the first of a number of back-to-back credit rating reviews later.

SURGING EMERGING

The return of risk appetite was closely tracking the recovery in oil and other commodity prices, although save-haven favourite gold remained an outlier as it consolidated a 13-month high.

Benchmark Brent futures were at two-month highs of $37.48 per barrel as they headed for a gain of 6.6 percent this week and industrial metals iron ore and copper both hit 4-month highs, with the latter on course for its best week in roughly six months.

"Now (NYSE: DNOW - news) you have had some stability in the oil price and some producer currencies, you're starting to get more robust cost bases forming for commodities, which suggests that the vulnerability of metals to more downside is slowing," said Mark Keenan at Societe Generale (Swiss: 519928.SW - news) in Singapore.

Emerging markets stocks were roaring too. MSCI (NYSE: MSCI - news) 's 23-country EM index rose 0.6 percent for a sixth day of gains, its longest winning streak and best week since October.

Russian markets remained on a red hot streak as the rise in oil and easing inflation worries sent yields on Russian government bonds to their lowest in a year and a half.

Brazil's Bovespa index had surged more than 5 percent on Thursday, its biggest gain in six years, on news that President Dilma Rousseff could be implicated in a sweeping corruption scandal.

That encouraged investors who blame her administration's policies for driving Brazil into deep recession.

MSCI's broadest index of Asia-Pacific shares outside Japan ended the week at its highest in almost two months. Another 0.6 percent rise saw it chalk up a 5.5 percent gain for the week, its strongest since October.

Japan's Nikkei was up 5 percent on the week too, while the two main Chinese share markets took their gains since Monday to 4.7 and 3.5 percent.

Investors are awaiting the start of the annual meeting of China's parliament on Saturday, which will map out economic goals for the next five years, with markets hoping for enough stimulus to fend off any major slowdown worries.

The People's Bank of China (HKSE: 3988-OL.HK - news) set the midpoint rate at 6.5284 per dollar prior to Friday's market open, 0.20 percent firmer than the previous fix. (Reporting by Marc Jones; Editing by Toby Chopra)