European markets are likely to open unchanged or slightly improved on Friday as investors keenly await the latest monthly employment data from the U.S. Labor Department. This report is essential for insights into the U.S. economic outlook and potential interest rate adjustments.
Currently, projections suggest the U.S. added 140,000 jobs in September, following an increase of 142,000 positions in August, with the unemployment rate expected to remain steady at 4.2 percent.
According to the CME Group's FedWatch Tool, there is a 65.4 percent probability that the Federal Reserve will decrease rates by a quarter-point, while a 34.6 percent chance exists for a more significant half-point cut in November.
Attention will also turn to the forthcoming earnings season, where major U.S. banks are set to begin reporting their third-quarter results at the end of the coming week.
In Asia, stock markets experienced broad gains, highlighted by a near 2 percent rise in Hong Kong's Hang Seng Index, driven by optimism regarding prospective economic stimulus measures from China.
Elsewhere, gains were restrained amid escalating tensions in the Middle East. On Thursday, Israel reported striking Hezbollah's intelligence base in Beirut amidst increasing concerns about escalating conflict in the region.
U.S. President Joe Biden has indicated ongoing discussions concerning potential support for Israeli attacks on Iranian oil facilities.
The U.S. dollar edged close to a six-week high, poised for its largest weekly gain since April, driven by safe-haven demand.
Gold saw a slight increase, while oil prices remained relatively stable after a significant 5 percent rise during the previous U.S. trading session. Both Brent and WTI crude oil contracts are set for weekly gains of approximately 8 percent, as traders anticipate potential supply disruptions in the Middle East, which accounts for nearly one-third of global supply.
U.S. stock markets closed slightly lower overnight, with looming payroll data and concerns over escalating Middle East conflicts weighing on sentiment.
In economic developments, there was a slight rise in weekly jobless claims last week, while U.S. service sector activity reached its highest level in 18 months in September, driven by robust growth in new orders, according to separate data sets.
The tech-focused Nasdaq Composite fell marginally, while the S&P 500 decreased by 0.2 percent, and the Dow Jones Industrial Average declined by 0.4 percent.
In Europe, stocks ended Thursday on a downward trend as a survey revealed that the euro area private sector contracted for the first time in seven months in September. The pan-European STOXX 600 index fell by 0.9 percent, Germany's DAX dipped 0.8 percent, France's CAC 40 dropped 1.3 percent, and the U.K.'s FTSE 100 decreased by 0.1 percent.
