Banks lift European markets

European stocks opened the week with modest gains, largely supported by bank shares. Investors are bracing for a pivotal series of central bank meetings in the coming days, with the US Federal Reserve at the center of attention.

Rubis shines after takeover talk

Shares of French energy retailer Rubis surged following reports of potential acquisition interest. According to market sources, both CVC Capital Partners and commodities trader Trafigura are considering a deal. The news sent Rubis stock up by 6.7 percent, making it the best performer within the STOXX 600 index. The company's market value is estimated at around 3.5 billion dollars.

Banking sector leads the way

The pan-European STOXX 600 index climbed 0.2 percent in early trading, reaching 556.2 points. Banks, typically sensitive to rate moves, were the strongest contributors, adding nearly 0.8 percent. In France, the CAC 40 index advanced 0.4 percent. Shares of Societe Generale gained 1.3 percent, while BNP Paribas and Credit Agricole rose about 0.9 percent each.

France faces ratings challenge

Meanwhile, the market continues to digest Fitch's downgrade of France's sovereign credit rating announced on Friday. The move complicates the position of newly appointed Prime Minister Sebastien Lecornu, who is about to engage in difficult budget negotiations.

Focus on the Federal Reserve

The spotlight later this week will turn to the Federal Reserve, as investors await its decision on interest rates. Any signals from the US central bank are expected to set the tone for global markets in the near term.

Optimism fueled by rate cut expectations

Global markets opened the week on a positive note as traders increasingly expect the US Federal Reserve to respond to signs of labor market weakness with at least a quarter-point rate cut. Such a move would mark the first dovish policy shift of the year.

Asia hovers near multi-year highs

Asian stocks on Monday held steady near four-year peaks. Investors anticipate a packed week of central bank meetings that could restart the Fed's easing cycle and potentially pave the way for a series of rate reductions in the months ahead.

Central banks under the spotlight

Beyond the Fed, attention is also directed toward other key regulators. The Bank of Canada is widely expected to lower its rate by 25 basis points, while both the Bank of Japan and the Bank of England are likely to leave policy unchanged.

European and US futures edge higher

European equity markets are set to open with modest gains: futures on the EUROSTOXX 50 advanced 0.3 percent. US benchmarks also pointed upward, with S&P 500 and Nasdaq futures adding 0.1 percent each.

Market bets on the Fed

Traders are pricing in with near certainty a quarter-point Fed rate cut, which would bring the federal funds target range down to 4.0 - 4.25%. Futures imply only a slim four percent chance of a deeper, half-point cut.

Quiet session in Asia

With Japan observing a public holiday, Asian markets saw subdued activity. On the currency front, the euro showed little reaction to Fitch's recent downgrade of France's sovereign credit rating.

Euro holds steady

The single currency started the week with little movement, trading at 1.1732 dollars, just below its recent peak of 1.1780. The US dollar slipped 0.15 percent against the yen to 147.44, staying within the month-long range of 146.22 to 149.13.

Support from the ECB

The euro found stability in firm policy signals from the European Central Bank. Last week, the ECB emphasized that its current stance is well positioned. Investors are now awaiting remarks from several ECB officials, including President Christine Lagarde, scheduled later this week.

Nikkei closed, futures active

Japan's Nikkei index remained shut on Monday due to a public holiday, though futures traded around 44,520 points, slightly below the last close of 44,768. The index had advanced more than 4 percent over the past week.

Asia's resilience continues

The MSCI index tracking Asia-Pacific shares outside Japan held steady in the latest session, although earlier it touched a fresh four-year high.

Gains in Seoul and Beijing

In South Korea, the Kospi rose 0.4 percent, setting another record high after the government scrapped plans to raise taxes on stock investments.Chinese markets also showed strong momentum: the CSI300 gained 0.5 percent, while Hong Kong's Hang Seng added 0.2 percent. Investor appetite for Chinese tech stocks grew as hopes rose over progress in trade talks between Beijing and Washington.

Talks in Madrid move forward

On Sunday evening, US and Chinese officials wrapped up the first day of trade discussions in Madrid, with negotiations set to resume later on Monday. President Donald Trump commented that the timing of a potential sale of the Chinese short-video platform TikTok is still under review, and no final decision has been made.

China's economy shows signs of slowing

Fresh economic figures released Monday reveal that China's growth momentum weakened in August. Industrial output, retail sales and other activity indicators fell short of expectations.The property sector remains under pressure, with real estate investment continuing to decline. Housing prices dropped by another 0.3 percent last month, extending the downward trend that has persisted since the start of 2023.

Oil edges up, gold steady near highs

Commodities saw moderate gains at the start of the week. Brent crude rose 0.5 percent to 67.33 dollars a barrel, while US crude climbed by the same margin to around 63 dollars.

Gold prices held firm at 3644 dollars per ounce, staying close to last week's record high of 3673.95 dollars.