European Shares Seen Up On Fed Rate Cut Optimism; French Confidence Vote Eyed

(RTTNews) - European stocks are seen opening a tad higher on Monday as dismal August U.S. jobs report has put a half-point September rate cut 'in play'.

Investors will also keep a close eye on the political development in France, where Prime Minister Francois Bayrou faces a confidence vote today, which he is expected to lose.

Opposition leaders across the political spectrum made clear they would vote to oust Bayrou.

President Macron has so far resisted the idea of renewed snap elections and would therefore be required to appoint a new prime minister, who could be from the centre-left.

In economic releases, industrial production and foreign trade figures from Germany and investor confidence data from the euro area are due later in the session.

Meanwhile, with inflation stabilizing in the bloc and U.S. tariff tensions easing, the European Central bank is expected to hold interest rates steady again this week.

Across the Atlantic, this week's trading is likely to be driven by reaction to reports on consumer and producer price inflation, with signs of rising prices likely to temper some of the enthusiasm for a larger rate cut.

Asian stocks were mostly higher, with Japanese markets leading regional gains following the resignation of Prime Minister Shigeru Ishiba.

U.S. Treasury yields hit five-month lows, the dollar wobbled, and gold held near record highs as markets factored in chances of a jumbo rate cut by the Federal Reserve later this month.

Oil prices jumped more than 1 percent in Asian trade as OPEC+ agreed to further raise oil production from October and U.S. President Trump signaled readiness for fresh sanctions on Russia, aligning with calls from Treasury Secretary Scott Bessent.

Earlier, Bessent publicly pressed for stricter penalties on nations still importing Russian crude and argued that only a near-collapse of Russia's economy could push President Vladimir Putin toward peace talks.

U.S. stocks reached new intraday high before reversing course to end lower on Friday as weak jobs data sparked economic worries but raised hopes for imminent rate cuts. Treasury yields sank as data showed the U.S. economy added just 22,000 jobs in August, far short of expectations for 75,000 and down from an upwardly revised 79,000 jobs in July.

The jobless rate rose to 4.3 percent from 4.2 percent while June revisions showed a negative print, marking the first labor market shrinkage since 2020.

The Dow shed half a percent, the S&P 500 slid 0.3 percent and the tech-heavy Nasdaq Composite finished marginally lower.

European stocks closed lower on Friday due to growth concerns after the release of weaker U.S. payrolls data.

The pan European STOXX 600 eased 0.2 percent. The German DAX dipped 0.7 percent, France's CAC 40 gave up 0.3 percent and the U.K.'s FTSE 100 ended marginally lower.