A look at the day ahead in European and global markets from Stella Qiu

Asian markets started what promises to be a momentous month on the cautious side, with investors shunning risk assets ahead of Friday's U.S. jobs data and next week's presidential election.

Most Asian shares were down, led by a 2.3% drop in the Nikkei. Chinese stocks were an outperformer, with Hong Kong's Hang Seng index up 1.6% after a private survey showed that China's vast manufacturing sector returned to expansion in October.

The Caixin/S&P Global manufacturing PMI for China reinforced upbeat findings the day before in an official survey and suggests that the slowdown in the world's second-largest economy may have troughed, as a series of government stimulus measures begins kicking in to boost growth.

Oil extended its latest rally into a third day, up almost 2% on Friday after reports that Iran was preparing a retaliatory strike on Israel from Iraq in the coming days.

The dollar recouped some of its losses on the yen, but currencies were range-bound overall.

Looking ahead to Europe, investors found some solace in an earnings beat by Amazon, which jumped 5.3% after the bell and added $104 billion to its market cap. Both EUROSTOXX 50 futures and FTSE futures inched up 0.1%.

Investors will be watching if UK gilts extend their sell-off and whether the pound would break its 200-day moving average as markets hand down their judgment on Chancellor Rachel Reeves' debut budget.

Analysts fear the spending-heavy budget could put upward pressure on inflation and had investors betting that the Bank of England may have to slow the pace of future rate cuts. Two-year gilt yields have surged 27 basis points so far this week to the highest since May, although that seems tame compared with the 89-basis-point rout that followed Liz Truss' 2022 effort.

In the U.S., earnings are due from Exxon Mobil and Chevron, along with the high-profile ISM manufacturing survey and the non-farm payrolls report.

Hurricanes and strikes have made it tricky to read the jobs data. Forecasts are centred on a rise of 113,000 new jobs in October but a strong ADP report and lower jobless claims data suggest the risks are to the upside.

The unemployment rate likely stayed at 4.1%, so barring a major surprise, markets will likely stick to wagers that the Federal Reserve will cut by a quarter-point next Wednesday. That is more than 94% priced in.

Of course, the day before that there is the U.S. presidential election, with candidates Donald Trump and Kamala Harris running neck and neck. Some investors have been trading on expectations that a Trump win could bring inflationary policies.

Key developments that could influence markets on Friday:

-- UK manufacturing PMI

-- U.S. non-farm payrolls

-- ISM Manufacturing survey

-- Exxon Mobil, Chevron earnings