(fxcue news) - European stocks may open flat to slightly higher on Friday as investors await the U.S. Labour Department's highly anticipated monthly jobs report later in the day for more clarity regarding the outlook for the U.S. economy and interest rates. Economists currently expect the report to show employment rose by 140,000 jobs in September after an increase of 142,000 jobs in August. The unemployment rate is expected to hold at 4.2 percent. CME Group's FedWatch Tool currently indicates a 65.4 percent chance the Fed will lower rates by a quarter point and a 34.6 percent chance of another half point rate cut in November. Focus will also shift to the earnings season, with some of the big U.S. banks expected to kick off the third-quarter earnings season at the end of next week. Asian stocks were broadly higher, with Hong Kong's Hang Seng rising nearly 2 percent on optimism about potential stimulus measures from China. Gains elsewhere remained muted due to worsening tensions in the Middle East. Israel on Thursday said it hit Hezbollah's intelligence headquarters in the Lebanese capital Beirut amid growing fears of an all-out war in the region. U.S. President Joe Biden said the U.S. was discussing whether to support potential Israeli strikes against Iranian oil facilities. The dollar hovered near a six-week high and headed for its biggest weekly gain since April, driven by safe-haven demand. Gold edged higher while oil prices were little changed after rallying about 5 percent in the overnight U.S. trading session. Both Brent and WTI crude contracts remain on track for weekly gains of around 8 percent as traders priced in the likelihood of supply disruptions in the Middle East, which accounts for about a third of global supply. U.S. stocks finished slightly lower overnight as the payrolls report loomed and concerns mounted over a widening regional conflict in the Middle East. In economic news, weekly jobless claims saw a modest increase last week while U.S. service sector activity accelerated to a 1-1/2-year high in September amid strong growth in new orders, separate set of data revealed. The tech-heavy Nasdaq Composite finished marginally lower, the S&P 500 eased 0.2 percent and the Dow dipped 0.4 percent. European stocks ended lower on Thursday as a survey showed the euro area private sector shrank for the first time in seven months in September. The pan European STOXX 600 gave up 0.9 percent. The German DAX dropped 0.8 percent, France's CAC 40 tumbled 1.3 percent and the U.K.'s FTSE 100 slipped 0.1 percent.