European shares rise ahead of Euro zone, U.S. data

The STOXX 600 index was 0.3% higher, with all European markets trading in the green

European shares started the week on a positive note on Monday, as investors braced for U.S. inflation data to gauge the Fed's monetary policy trajectory and slew of other key data from Europe.

The STOXX 600 index was 0.3% higher, with all European markets trading in the green.

Oil and gas stocks added 0.7% as oil prices increased for a fifth session after U.S. recession fears eased while geopolitical tensions in the Middle East also supported.

Financials were also 0.7% higher, as Hannover Re soared almost 5% after the German reinsurer reported its first-half results. The sector was the top contributor to the gains on the benchmark index.

Last week, the absence of major economic data resulted in a weak performance for the STOXX 600, which managed a modest weekly gain by Friday.

Investors will be focused on the U.S. consumer prices data set to come on Wednesday, which will shape the direction for the country’s monetary policy.

A massive selloff swept across global currencies and stock markets last week amid recession fears in the U.S. economy. However, better-than-expected weekly jobs data in the U.S. calmed investors.

Markets are still in recovery mode. However, all that data is going to be important for market participants to evaluate whether we are in for soft landing or if something more sinister is on the cards, according to Lilian Chovin, head of asset allocation at Coutts.

The Fed meets on September 18-19 and markets are pricing in a 50% probability of 50 bp cut.

Employment data from the UK and inflation figures from Spain will also be on investors' radar later in the week. Euro zone's flash employment, gross domestic product and inflation figures are set for release on Wednesday.