© Reuters

By Peter Nurse

Investing.com – European stock markets are set to open higher on Monday on heightened hopes for a diplomatic solution to the war in Ukraine at the start of a week dominated by major central bank meetings, including the Federal Reserve.

As of 0200 ET (0700 GMT), the Germany contract was trading up 2%, France up 1% and the UK contract up 0.7%.

The next round of talks on the war in Ukraine between the two principals is scheduled for Monday morning, but the noises emerging from the last session were reasonably optimistic.

US Undersecretary of State Wendy R. Sherman said Sunday that Russia was showing signs that it might be willing to conduct substantive negotiations, while Ukrainian negotiator Mykhailo Podolyak said Russia was “beginning to speak constructively.

That said, despite the upbeat tone, the fighting is raging, with Russia launching a destructive bombardment of a major Ukrainian base near the border with NATO member Poland on Sunday.

Away from events in Eastern Europe, the focus this week will be on the policy-making meetings of a number of key central banks.

The government is expected to announce its first interest rate hike since 2018 on Wednesday as policymakers try to balance the twin threats of inflation, which is at its highest level in four decades, and economic uncertainty resulting from the war in Ukraine.

They are also expected to raise rates again this week, while the central banks of , , and will also hold meetings.

Back in Europe, euro zone finance ministers are expected to meet later on Monday to discuss potential support for the region’s economy given the risks to growth following the Russian invasion of the EU. Ukraine just as it begins to recover from the pandemic.

In company news, Telecom Italy (MI:) will be in the spotlight after Italy’s largest telephony group announced on Sunday that it would enter into formal talks with KKR & Co (NYSE:). to assess the potential offer from the private equity giant, nearly four months after the approach.

German Bank (DE:) could also be in focus after the German lender said on Friday it would end its business in Russia, changing its stance after criticism over its ongoing ties.

Oil prices weakened on Monday, extending last week’s decline on hopes of progress in diplomatic efforts to end the war in Ukraine as well as traders bracing for higher U.S. interest rates, and therefore to a probably stronger dollar.

As of 2 a.m. ET, futures were trading down 2.7% at $106.33 a barrel, while the contract was down 2.4% at $109.97.

Both contracts have jumped since Russia invaded Ukraine on Feb. 24, with both reaching their highest level since 2008 last week. However, U.S. crude still recorded a weekly decline of 5.7% last week, while Brent last week was down 4.8%.

Additionally, it fell 0.2% to $1,981.45 an ounce as it traded 0.1% higher at 1.0912.

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