BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are likely to open on a cautious note Monday as investors await a widely anticipated rate cut by the Federal Reserve and look for progress in U.S.-China trade talks.
The Fed is expected to cut interest rates by 25 basis points at its policy review that ends on Wednesday, lowering borrowing costs for the first time in more than a decade.
But markets await chief Jerome Powell's speech to understand how does the Fed frame the narrative over future moves amid a protracted tariff dispute with China.
Meanwhile, two days of talks between top U.S. and Chinese negotiators are scheduled to restart on Tuesday, although hopes of an immediate breakthrough appear limited.
U.S. President Donald Trump on Friday said that China may wait until after the 2020 U.S. presidential election to sign a trade agreement because Beijing would prefer to reach a deal with a Democrat.
Asian markets slipped into the red after Chinese industrial profits data disappointed, adding to fears of a global slowdown.
The dollar held firm to hover near a two-month high against a basket of currencies while the British pound hit a 27-month low after reports that Prime Minister Boris Johnson is 'turbo-charging' preparations to leave the EU without a deal on 31 October.
Oil prices fell in Asian trade after Iran described emergency talks on a multi-party nuclear agreement with a group of signatories as 'constructive'.
The U.K. private sector activity continued to fall in three months to July but at a slightly slower pace, the monthly growth indicator from the Confederation of British Industry showed Sunday.
The balance of firms posting growth came in at -9 percent. This was the ninth straight rolling quarter of either flat or falling volumes.
Mortgage approvals data from the U.K. is due later in the day, headlining a light day for the European economic news.
U.S. stocks advanced on Friday, with encouraging GDP data for the second quarter and better-than-expected earnings numbers from the likes of McDonald's, Twitter and Alphabet helping underpin investor sentiment.
The Commerce Department report showed that real gross domestic product climbed by 2.1 percent in the second quarter following the 3.1 percent jump in the first quarter. Economists had expected the pace of GDP growth to slow to 1.9 percent.
The S&P 500 rose 0.7 percent and the tech-heavy Nasdaq Composite climbed 1.1 percent to reach fresh record closing highs while the Dow edged up 0.2 percent.
European markets inched higher on Friday on the back of some upbeat earnings reports from the U.S. and Europe.
The pan European Stoxx 600 edged up 0.3 percent. The German DAX rose half a percent, France's CAC 40 index gained 0.6 percent and the U.K.'s FTSE 100 index added 0.8 percent.
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