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London - European shares rose on Monday as investors counted on easy money from central banks in the eurozone and United States to offset the risk of further disappointing global economic data, which still kept commodities under pressure.
The common currency - which fell around 1.3% against the dollar last week as some traders priced in a possible interest rate cut - was also higher on expectations that the European Central Bank should not signal more drastic action when it meets this week.
The formation of a new government in Italy at the weekend, ending two months of political stalemate, added to the stronger sentiment with Milan's main stock index, the FTSE MIB, gaining over 1%t in early trade.
The broad FTSE Eurofirst index of top European shares was up 0.4%, adding to last week's 3.7% gain, while Germany's DAX rose 0.6% and France's CAC 40 was 1.0% Higher.
However, activity across the markets was expected to be light with Japan closed for a holiday, China off until Thursday, and the ECB and U.S. Federal Reserve meeting later in the week.
Speculation is rife that the ECB will cut its main interest rate at its monthly policy meeting on Thursday, given recent weak economic data from across the region.
A Reuters poll of 76 economists showed a narrow majority of 43 expected a rate cut of 25 basis points, taking the ECB's refinancing rate to a record low of 0.50%.
"The ECB will probably cut the refi rate 25 basis points, but... this move shouldn't weaken the euro unless the bank drops hints that some more dramatic policy - like a negative deposit rate - is back on the agenda," said Anna Hibinio, a global forex analyst at JPMorgan.
The euro was up 0.35% to $1.3080 against a generally weaker dollar, but remained well below a seven-week high of $1.3202 hit on April 16 before traders priced in the rate cut speculation.
The dollar also dropped 0.2% to ¥97.88, below a 4-year high of 99.95 set earlier in April after the Bank of Japan unveiled monetary stimulus plans.
The Fed is widely expected to keep its current pace of bond buying at $85 billion a month when the policy-setting Federal Open Market Committee announces its decision at 20:15 on Wednesday.
The uncertain outlook for economic growth, especially in the world's two big commodity consumers, the United States and China, kept oil and copper prices under pressure, although gold rose 1% as its recovery from recent lows continued.
Brent crude slipped 41 cents to $102.75 a barrel, after making its biggest weekly gain since November last week despite data showing the U.S. economy grew less than expected pace in the first quarter. US oil was down 27 cents at $92.73 a barrel.
Gold futures, which often provide trading cues to cash gold, hit $1 472.20 an ounce before settling at $1 468.90 an ounce, up $15.30. Spot gold rose $6.70 to $1 473 an ounce .
