FX.co ★ European Shares Seen Up As Weak US Data Revives Fed Easing Bets

European stocks are predicted to open positively on Monday, following the release of subpar U.S. data on Friday that sparked hope of impending interest rate cuts by the Federal Reserve. With a relatively quiet week ahead on the U.S. economic calendar, focus might shift to earnings reports from several prominent companies.

Back in the U.K., investors are expected to closely monitor first quarter GDP figures and the Bank of England's policy meeting this week. Meanwhile, Asian markets were mostly trading high, albeit with Japan and South Korea's stock exchanges closed due to holidays.

China's Shanghai Composite index saw a 1% increase following the completion of an extended Labor Day weekend. This momentum followed an announcement by the Communist Party's Politburo affirming its commitment to bolster the economy through prudent monetary and proactive fiscal policies.

However, China's services sector saw a bit of a slow down in April, according to a recent Caixin survey that showed a marginal drop in its PMI score to 52.5 from March's 52.7. Meanwhile, the yen dipped following a strong performance last week, possibly due to the eruption of Japanese authorities into the currency market.

Oil and gold prices had minor appreciations in Asia amidst dwindling hopes for a Gaza ceasefire. Israel heightened attacks on Rafah led to the deaths of 22 Palestinians, after Hamas fired rockets at the Karem Abu Salem crossing, costing three Israeli soldiers their lives.

Friday saw U.S. stocks skyrocketing, especially after Apple's impressive earnings results were released. Moreover, a weaker-than-expected jobs report for April, and a surprise contraction in the service sector activity for the same month, are boosting arguments for interest rate cuts by the third quarter. Data indicates a climb of 175,000 jobs in non-farm payroll employment in April, following an increased 315,000 job spike in March. However, the unemployment rate inched up to reach 3.9% from the previous month's 3.8%.

On Friday, the Dow increased by 1.2%, the tech-centered Nasdaq Composite by 2%, and the S&P 500 by 1.3%. Likewise, European stocks registered a positive close on Friday, supported by impressive earnings reports and the potential of interest rate cuts. The pan-European STOXX 600 increased by half a percent, along with Germany's DAX rising by 0.6%, and France's CAC 40 and the U.K.'s FTSE 100 both improved by roughly half a percent.