Global stocks and commodities gained on Friday, buoyed by firm U.S. data the previous session, lifting risk appetite ahead of hotly anticipated jobs data which will give more evidence on the state of the global economy.

Investors were reluctant to take big positions ahead of U.S. non-farm payrolls data due at 1330 GMT. The U.S. economy is expected to have shed 175,000 jobs in October, the 22nd month of declines but a smaller decline than in September.

Optimism that the figure may come in lower than expected was fostered after the U.S. Labor Department said initial claims for state unemployment benefit had dropped to its lowest level since early January.

Data showing that U.S. productivity grew at its fastest pace in six years also helped lift demand for riskier assets like equities and commodities like oil and metals.

By 0859 GMT the MSCI world equity index was up 0.4 percent, its highest since last Friday and up 2.6 percent this week.

"The key figure we've got out today is the non-farm payrolls, so if it doesn't live up to expectations then I think we're going to see a big dump in these markets," said Mike Lenhoff, strategist at Brewin Dolphin.

"If the figure at least matches expectations, and if it's better, we'll do okay and we should end the week on a reasonably firm note," he said.

Reflecting the increased appetite for risk, emerging markets equities outperformed, up 1.1 percent.

European stocks tracked gains in Asia with the FTSEurofirst 300 index up 0.5 percent.

G20 WATCHED

As well as the payrolls data, a meeting of G20 policymakers due to start later on Friday in Scotland will also be closely watched.

The policymakers are agreed that it is too early to pull the plug on the economic life-support packages, British finance minister Alistair Darling told Reuters in an interview.

The U.S. dollar held steady against the euro at around $1.4880 but retreated 0.3 percent to 134.60 yen .

Analysts said a strong payrolls number would no necessarily be a positive for the dollar as the possibility of interest rate increases in the near term look set to remain remote.

"The dovish Fed statement this week has raised the bar for a positive jobs number to lead to a higher dollar as the Fed is not likely to tighten policy anytime soon." said Lee Hardman, currency strategist at Bank of Tokyo-Mitsubishi UFJ.

Higher yielding currencies gained ground. The Australian dollar rose 0.7 percent and the New Zealand dollar added 0.6 percent.

Euro zone government bond futures were flat on the day at 121.02 and yields narrowly mixed as investors stood on the sidelines ahead of the payrolls data.

The interest rate-sensitive two-year Schatz yield was down 0.9 basis points on the day at 1.31 percent.

The 2/10 year yield spread was at 203 bps, steady since the European settlement close on Thursday.

But commodities, which tend to gain as risk appetite recovers and the demand outlook brightens, gained.

Crude moved comfortably above $80 per barrel while copper prices gained over a percent.

Additional reporting by Tamawa Desai and Tricia Wright; Editing by Victoria Main