European shares were subdued at the start of a data-packed week, the highlight of which will be the Federal Reserve starting its long-awaited monetary-easing cycle, with many investors leaning towards a bigger-than-expected rate reduction.
The pan-European STOXX 600 index was up 0.1%, with most major European markets trading higher, except for a 0.2% drop in Germany.
All eyes will be on the U.S. central bank's rate decision on Wednesday, with money markets pencilling in a 60% chance of a 50-basis-point rate cut, and a total easing of 120 bps in 2024.
"Whether or not the Fed cuts rates by 25 bps or 50 bps the market reaction will depend on two things -- how they communicate the cut and their reasons (if they) cut by 50bps -- and also the Dot Plot and what it tells us about Fed members' current expectations for the terminal rate," said Kathleen Brooks, research director at XTB.
Among sectors, healthcare and utilities were the top gainers, rising 0.5% and 0.1%, respectively, while miners led the losses, falling 0.7% after rising around 4% last week as commodity prices gained.
For the day, the euro zone's total trade balance in July, due at 0900 GMT, will help investors assess the health of the region's economy.
Comments from European Central Bank's vice president, Luis de Guindos, and chief economist, Philip Lane, later in the day will also be on investors radar for any signs on the central bank's interest-rate path.
Among individual movers, France's Rexel jumped 9.3% after the Paris-listed group rebuffed an around $9.4 billion acquisition offer from billionaire Brad Jacobs-led QXO.
French drugmaker Ipsen rose 5.4% after RBC raised its rating to "outperform" from "sector perform".
UniCredit climbed 1.6% following CEO Andrea Orcel's comments that a merger with Commerzbank (ETR:CBKG) could add value for all stakeholders and create a stronger bank.
On the flip side, shares of Nestle weighed on the benchmark index with a 0.7% fall after Morgan Stanley cut the stock's rating to "underweight" and reduced its target price.
Phoenix Group was down 2.8% after the British insurer halted the sale process of its SunLife business due to market uncertainty.
