The pan-European STOXX 600 index was down 0.1% but held below its all-time high and was on track for a slim weekly rise.
Rate-sensitive banks and travel stocks were the top decliners, while investment group Ashmore Group tumbled 4.6% after its full-year revenue dipped.
A private survey showed activity in China’s services sector contracted sharply in August as restrictions to curb the COVID-19 Delta variant threatened to derail the recovery.
Data later in the day is likely to show US employment growth pulled back in August, adding to recent signs of economic slowdown that could spur the Fed to provide support for longer.
“It would probably take a major disappointment (say, a gain of significantly less than 500k) to put the timing of tapering in question,” UniCredit analysts told clients. “On the other hand, a robust and higher-than-expected reading should enhance investors’ focus on the issue of tapering.”
Euro zone business activity remained strong last month, IHS Markit’s survey showed, suggesting the bloc’s economy could be back to pre-COVID-19 levels by year-end despite fears about the Delta variant of the coronavirus and widespread supply chain issue.
The European Central Bank will meet next week amid calls from several hawkish members to slow down its pandemic-era purchases programme.
A Reuters poll showed the ECB will announce a cut to the pace of its asset purchases from next quarter at its meeting this month but will keep buying bonds through 2024 at least under its main programme, and possibly much longer.
Payments company Nexi slipped 0.5% after Italy’s competition watchdog said it had opened an investigation into the company’s planned merger with domestic rival SIA.
Spanish fund distribution firm Allfunds jumped 8.1% after it reported results.
German exchange operator Deutsche Boerse is due to announce new entrants to the blue-chip DAX index on Friday, part of the index’s biggest ever overhaul.