Portugal Colonial - Stocks steady, dollar down before US jobs data

Further US interest rate hikes are expected in the coming months to try and cool decades-high inflation.

However, markets are starting to price in a less aggressive pace of rate tightening than seen so far this year, easing fears of a global recession.

"Investors are turning more concerned about the aggressive Fed tightening and are ready to bet that the rate hikes would slow down in the next few meetings," Swissquote analyst Ipek Ozkardeskaya noted before Friday's jobs data.

Analysts expect the monthly report to show 250,000 posts were created in September, which would be the weakest since late 2020 but still a healthy figure suggesting a strong labour market.

There is a fear that a result higher than expectations could spark another sell-off across risk markets as investors bet on more bumper rate hikes.

Fed officials have consistently warned that they are determined to ramp up borrowing costs to fight inflation, even at the expense of a recession -- feeding worries among traders that the world economy is heading for such a scenario.

OANDA analyst Edward Moya said a consumer price index report next week was also on traders' radars.

"Economists are not expecting a significant drop in pricing pressures, but many traders think that a cool report could happen and that will force the Fed to change their tune next week."

While major European stock markets steadied Friday, Asian indices and Wall Street dropped overnight.

Adding to the unease was a warning from US President Joe Biden that the world faced nuclear "Armageddon" for the first time since the 1962 Cuban missile crisis.

He told a Democratic Party fundraiser in New York that Russian President Vladimir Putin was "not joking" when he threatened to use nuclear weapons over the Ukraine war.

Elsewhere, oil prices jumped and were set for their biggest weekly gain since March after OPEC and other major producers led by Russia agreed to slash daily output by two million barrels.

- Key figures around 1045 GMT -

London - FTSE 100: UP 0.1 percent at 7,006.14 points

Frankfurt - DAX: DOWN 0.1 percent at 12,459.38

Paris - CAC 40: UP 0.1 percent at 5,941.65

EURO STOXX 50: DOWN 0.2 percent at 3,426.51

Tokyo - Nikkei 225: DOWN 0.7 percent at 27,116.11 (close)

Hong Kong - Hang Seng Index: DOWN 1.5 percent at 17,740.05 (close)

Shanghai - Composite: Closed for a holiday

New York - Dow: DOWN 1.2 percent at 29,926.94 (close)

Pound/dollar: UP at $1.1190 from $1.1161 on Thursday

Euro/dollar: UP at $0.9796 from $0.9794

Euro/pound: DOWN at 87.53 pence from 87.74 pence

Dollar/yen: DOWN at 144.92 yen from 145.11 yen

Brent North Sea crude: UP 1.1 percent at $95.41 per barrel

West Texas Intermediate: UP 1.2 percent at $89.49 per barrel

L.Henrique--PC