European markets set to open higher as focus turns on French confidence vote

LONDON — European stocks are expected to start the new trading week on a positive note, as market focus turns on France's imminent confidence due to take place later in the session.

The U.K.'s FTSE index is expected to open 0.3% higher, Germany's DAX up almost 0.5%, France's CAC 40 and Italy's FTSE MIB both seen 0.3% higher, respectively, according to data from IG.

Investors will be keeping a close eye on France on Monday, as French Prime Minister Francois Bayrou is widely seen losing a confidence vote. Bayrou called for the vote himself after ongoing wrangling with rival political parties over around 44 billion euros ($51.5 billion) worth of budget cuts.

Bayrou's aim was to bring France's budget deficit down to 4.6% in 2026 — a level still well above the European Union's deficit rules — but opposition parties have objected to spending cuts and tax rises in equal measure. If Bayrou is ousted on Monday, French President Emmanuel Macron will have to name the country's fifth prime minister in less than two years.

Asia-Pacific markets traded mostly higher Monday, as investors assessed Japan Prime Minister Shigeru Ishiba's resignation announcement over the weekend and eyed key economic data in the region.

U.S. stock futures were little changed on Sunday, with two critical inflation reports expected this week: the U.S. producer price index report for August is due on Wednesday morning, followed by the consumer price index on Thursday.

The inflation prints will be coming in after weaker-than-expected hiring data on Friday, which helped fuel investor hope that the U.S. Federal Reserve is likely to lower benchmark interest rates at its policy meeting later this month.

There are no major European earnings or data releases scheduled on Monday.