A "we're hiring" sign is displayed outside a Target store in Encinitas, California, U.S. August 1, 2025. REUTERS/Mike Blake

A look at the day ahead in European and global markets from Ankur Banerjee

With markets still in recovery mode after an action-packed week that has left risk momentum intact, the spotlight has shifted to the smattering of private economic data this week that may shed light on the health of the U.S. labour market.

The U.S. shutdown, now the second-longest ever behind the 2018-2019 shutdown that lasted 35 days, is set to continue and that means there will be no government economic data.

So, no nonfarm payrolls, no JOLTS job openings. Investors will instead parse through private employment data from ADP to gauge the direction of U.S. monetary policy. The ADP data is due later in the week.

A divided Federal Reserve has left investors searching for clarity. Fed Chair Jerome Powell surprised markets last week with a hawkish tone, suggesting the recent rate cut could be the last one for the year.

But influential Fed Governor Christopher Waller made the case on Friday for more policy easing to shore up a weakening labour market. Traders are pricing in a 69% chance of a rate cut in December, down from 90% a week earlier, CME FedWatch tool showed.

The afterglow of the widely expected trade truce between China and the U.S. has well and truly simmered down as Chinese stocks grind lower. It is a classic case of buy the rumour, sell the fact.

On Monday, data showed China's factory activity in October expanded at a slower pace as new orders and output both waned amid tariff anxiety, while big manufacturing hubs across the region also struggled to fire up in October.

Similar reports from Europe will be scrutinised by markets later in the session. European futures point to a higher open, while the euro was loitering at a three-month low.

Powell's hawkish tone has helped lift the dollar although analysts don't expect the greenback to stay strong for long, suggesting data will soon show cracks in the world's largest economy.

Key developments that could influence markets on Monday:

Economic events: Manufacturing data for October

(By Ankur Banerjee in Singapore; Editing by Jacqueline Wong)