European stock markets close higher

The regional Stoxx 600 index rose 0.28%, Germany’s Dax and France’s CAC were both nearly 0.4% higher, while Italy’s FTSE MIB and Spain’s Ibex 35 were up 0.7%

European markets closed marginally higher on Monday as traders searched for direction on a quiet day for markets.

The regional Stoxx 600 index rose 0.28% with most sectors closing in the green. Germany’s Dax and France’s CAC were both nearly 0.4% higher. Italy’s FTSE MIB and Spain’s Ibex 35 were up 0.7%.

U.K. markets are shut for the late May bank holiday, while in the U.S., markets are closed for the Memorial Day holiday.

It comes as speculation over when interest rates might start to come down dominates the market once again.

On Monday, two key ECB figures threw their weight behind the prospect of a June interest rate cut.

Thanks to this disinflationary process, inflation is converging to our 2% target in a sustained way, and the time is thus ripe in June to ease the monetary policy stance and start reducing rates, ECB Governing Council Member Olli Rehn said in a speech.

Meanwhile, the European Central Bank’s Chief Economist Philip Lane said in an interview with the Financial Times, “Barring major surprises, at this point in time there is enough in what we see to remove the top level of restriction.”

It suggests that the ECB is going to act in June — sooner than the U.S. Fed, which usually leads the way in monetary policy decisions.

A number of strong economic and labour data releases in the U.S. last week saw Goldman Sachs push its forecast for the Fed’s first rate reduction back to September from July.

There are no major earnings or data releases due Monday. Later in the week, traders will be eyeing euro zone inflation numbers for May due on Friday.