European shares edged higher in thin trading after a European Central Bank official signaled policy makers could consider successive rate cuts starting next month. Futures on the Nasdaq 100 climbed 0.4 per cent to a record high with U.S. markets closed.

Carmakers and utilities led a modest advance in the Stoxx Europe 600 index. Turnover was less than half the 20-day average for the time of day, with UK and U.S. markets closed for holidays. American equity futures advanced and a gauge of the dollar dipped.

The ECB shouldn’t rule out lowering borrowing costs at both its June and July meetings, Governing Council member Francois Villeroy de Galhau said, pushing back against fellow monetary officials who are uncomfortable at the idea of consecutive cuts. Chief Economist Philip Lane said earlier the central will have to keep policy restrictive through 2024, even after cutting interest rates next month.

An ECB rate cut in June has been widely telegraphed, but subsequent steps are less clear given uncertainty over wage growth and factors like the fighting in the Middle East. Data this week may show headline inflation in the euro region ticked up in May. 

“European inflation is back,” though the May spike may be temporary, Credit Agricole SA strategists led by Jean-François Paren wrote in a note. “This does not call the June cut into question but adds risk of de-pricing additional cuts later.”

Among individual movers in Europe, EFG International AG rallied as much as 4.7 per cent following a Bloomberg news report after the market close Friday that Julius Baer Group Ltd. is exploring a potential acquisition of its rival Swiss private bank. Julius Baer slipped 0.8 per cent.

The MSCI Asia Pacific index posted its biggest gain since May 16, led by stock gauges in Hong Kong, China, and Japan. 

A swath of inflation prints from Australia to Japan, the euro region and the U.S. is due this week as traders finesse bets on the outlook for monetary policy. The Federal Reserve’s favorite measure of underlying inflation is due on Friday and is expected to show modest relief.  Fed Chair Jerome Powell has stressed the need for more evidence that inflation is on a path to the 2 per cent goal before easing policy.

John Williams, Lisa Cook, Neel Kashkari and Lorie Logan are among the U.S. central bankers due to speak this week.

Trading of cash Treasuries was closed. The “T+1” rule that has the potential to cause trouble for overseas investors will come into effect when traders return from the long weekend — making U.S. equities settle in one day rather than two. 

Meanwhile, gold gained, while copper futures fell. Oil advanced after its biggest weekly loss in four, with the focus on an OPEC+ supply meeting on Sunday and U.S. demand at the start of the summer driving season. 

Some key events this week: 

• IMF holds discussions with Ukrainian authorities to review economic policies as the country seeks to unlock next tranche of US$2.2 billion in aid, Monday
• Cleveland Fed President Loretta Mester speaks at BOJ event in Tokyo; Minneapolis Fed President Neel Kashkari and ECB Governing Council member Klaas Knot address Barclays-CEPR International Monetary Policy forum, Tuesday
• South African election, the most significant since the end of apartheid, Wednesday
• Fed releases Beige Book economic survey, Wednesday
• South Africa rate decision, U.S. initial jobless claims, GDP, wholesale inventories, Thursday
• New York Fed President John Williams speaks at the Economic Club of New York, Thursday
• GDP data published for Canada, Eurozone, Turkey, Friday
• Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2 per cent to the highest since May 21 as of 3:58 p.m. New York time
• Nasdaq 100 futures rose 0.4 per cent to a record high
• Futures on the Dow Jones Industrial Average rose 0.2 per cent, more than any closing gain since May 21
• The MSCI World Index rose 0.2 per cent 
• The MSCI Asia Pacific Index rose 1 per cent
• The MSCI Emerging Markets Index rose 0.7 per cent
• The Stoxx Europe 600 rose 0.3 per cent
• The S&P/BMV IPC rose 0.1 per cent
• The Ibovespa Index rose 0.1 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.2 per cent
• The euro rose 0.1 per cent to $1.0859
• The British pound rose 0.3 per cent to the highest since March 20
• The Japanese yen was little changed at 156.88 per dollar
• The Mexican peso rose 0.2 per cent to 16.6590 per dollar
• The Brazilian real slid 0.1 per cent to 5.1717 per dollar

Cryptocurrencies

• Bitcoin rose 0.8 per cent to $69,246.10
• Ether rose 0.4 per cent to the highest since March 13
• Bonds
• The yield on 10-year Treasuries declined one basis point to 4.46 per cent
• Germany’s 10-year yield declined four basis points to 2.55 per cent
• Britain’s 10-year yield was little changed at 4.26 per cent

Commodities

• West Texas Intermediate crude rose 1.1 per cent to $78.55 a barrel
• Spot gold rose 0.7 per cent, more than any closing gain since May 17