European markets started the week in positive territory on Monday, lifted by renewed optimism that the U.S. Federal Reserve could move ahead with an interest-rate cut as early as next month.

In early European trading at 03:02 ET (08:02 GMT), Germany’s DAX rose 0.7%, France’s CAC 40 gained 0.6%, and the U.K.’s FTSE 100 advanced 0.4%, echoing the upbeat tone seen across Asian markets.

Growing Confidence in a December Fed Cut

Sentiment improved after Federal Reserve policymaker John Williams signalled last week that the U.S. central bank may be positioned to lower rates “in the near term.”

With the next Fed meeting scheduled for December 9–10, traders are now pricing in a roughly 69% probability of a 25-basis-point reduction, according to the CME FedWatch tool.

That shift in expectations has helped global equities recover from the significant pullback seen in recent weeks, driven largely by concerns over stretched valuations in major AI-related tech stocks.

U.K. Budget Takes Centre Stage This Week

In Europe, attention turns to Germany’s Ifo business climate index due later in the day, which is expected to show modest improvement for November.

Meanwhile, U.K. investors are preparing for Wednesday’s Autumn Budget. Finance Minister Rachel Reeves is expected to outline tax increases worth tens of billions of pounds to keep the country’s borrowing plans on track.

After years of sluggish growth following the 2007–08 financial crisis, the new Labour government has pledged to revive the economy. However, Reeves faces a delicate balance: reassuring bond markets while funding higher welfare spending.

Retailers Eye the Black Friday Surge

Earnings news is thin on Monday, and the global calendar remains quiet this week, with Japan on holiday and the U.S. heading toward Thanksgiving.

Retailers, however, are gearing up for Black Friday—the unofficial kickoff to the holiday shopping season and a crucial window for revenue generation in both Europe and the United States.

Chinese e-commerce giant Alibaba (NYSE: BABA) saw its stock jump after its revamped consumer AI platform, Qwen, recorded an impressive start during its public beta, boosting confidence in the company’s generative AI ambitions.

Oil Prices Stabilise as Ukraine Peace Talks Progress

Oil prices were steady on Monday following last week’s declines. Brent crude edged up 0.3% to $61.75 a barrel, while U.S. West Texas Intermediate gained 0.1% to $57.85.

Both benchmarks slid around 3% last week, hitting their lowest closes since late October amid speculation that a Russia–Ukraine peace agreement could eventually bring more Russian oil back to global markets.

The mood shifted slightly after U.S. and Ukrainian officials said on Sunday that talks had made meaningful progress on a potential peace plan.