* European stocks dip after five straight days of gains
* Oil retreats, too, but well off lows
* Focus turning to U.S. ISM non-manufacturing data
* U.S. dollar, Aussie dollar gain
By Dhara Ranasinghe
LONDON, March 3 (Reuters) - European stocks and oil prices
fell on Thursday but still held on to most of this week's gains,
as concern eased about the global outlook for economic growth.
Upbeat data from major economies this week and signs of a
rebound in commodity prices have helped restore some calm to
global markets after a turbulent start to the year.
Growth in Germany's private sector slid to a five-month low
in February but remained solid, underpinned by growing services,
a survey showed on Thursday.
European stock markets .FTEU3 .STOXX fell at the open
but remained close to two-month highs, reflecting a more upbeat
mood among investors.
Oil prices reversed earlier gains as swelling U.S. crude
inventories outweighed a growing belief that the market's
20-month-long rout is ending.
Brent crude prices LCOc1 slipped 0.9 percent to $36.63 but
are still some 35 percent above last month's lows. U.S. crude
futures lost 0.4 percent to $34.51 CLc1 . However, they have
risen more than a third since Feb. 11, when prices dropped to
levels not seen since 2003 at just over $26 a barrel.
The pan-European FTSEurofirst 300 was down 0.46 percent,
with blue-chip stocks in London .FTSE , Paris .FCHI and
Frankfurt .GDAXI all losing ground.
That followed a strong session in Asia, where MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS added another 1.1 percent to reach a two-month
peak.
Focus turned to the U.S. non-manufacturing ISM report, due
later on Thursday, with investors eyeing the employment
component for clues about Friday's non-farm payrolls report.
A solid report on Friday could bolster expectations that the
Federal Reserve remains on track to raise interest rates this
year and boost the dollar.
The dollar was back above 114.00 yen JPY= , up 0.5 percent
at 114.05 and moving towards the previous day's two-week high of
114.56. Even the low-yielding euro was up 0.6 percent at 123.95
yen EURJPY= .
"We are seeing better risk appetite weighing on the yen,"
said Niels Christensen, FX strategist at Nordea. "The focus is
on the ISM report, and if, like the manufacturing survey, it is
a good one, then we could see the dollar move higher."
Data on Wednesday showed U.S. private-sector jobs rising a
surprisingly strong 214,000 in February, adding to speculation
Friday's payrolls report would also be upbeat.
The calmer mood in world markets showed in the CBOE
Volatility index .VIX , a measure of investor anxiety, which
closed at its lowest level so far this year.
Against this backdrop, U.S. Treasury and German Bund yields
have pulled away from lows hit in February as greater risk
appetite lessens the appeal of safe-haven bonds.
The Australian dollar was up 0.2 percent to $0.7303 AUD=D4
after earlier reaching a 2016 high of $0.7325. Data showed
Australia's fourth-quarter economic growth unexpectedly picked
up to an annual 3.0 percent.
Yet fissures remain in the global outlook, with the European
Central Bank likely to ease monetary policy further when it
meets next week.
"The overriding economic concerns that were vexing investors
at the end of last year are still here - concerns about a
weaker Chinese economy, for instance," said Michael Hewson,
chief markets analyst at CMC Markets in London. "That makes me
cautious about the rebound in stock markets."