European Shares Seen Higher On Stimulus Hopes

However, Democrats and Republicans have yet to come to an agreement over further stimulus measures before some previous measures expire at the end of the week.

U.S. Treasury Secretary Steve Mnuchin said the package will contain extended unemployment benefits with 70 percent "wage replacement".

Asian markets are trading mixed as investors fretted about worsening U.S.-China ties. Tech gains helped cap the downside after Intel signaled it might give up manufacturing its own components due to delays in new 7 nanometer chip technology.

Also soothing sentiment, data out of China showed profits at the country's industrial firms rose for a second straight month and at the fastest pace in over a year, adding to signs of economic recovery.

On the coronavirus front, the overall number of global cases topped 16.1 million and the deaths have increased to over 647,000 as of Monday morning, according to the Johns Hopkins University.

Some U.S. Covid-19 hotpots such as Florida, Arizona, California, Texas and New York have reported decreasing numbers of cases and deaths on Sunday.

The dollar index eased, helping gold prices climb to a record high. Oil prices slipped as the Covid-19 pandemic took a turn for the worse.

Germany's Ifo business confidence survey data is due later in the day. The business sentiment index is expected to rise to 89.3 in July from 86.2 in the previous month.

Across the Atlantic, the spotlight may shift to the Federal Reserve's monetary policy meeting this week, although expectations are low for any surprises.

Since rates are already at near-zero levels, traders may look to the Fed's accompanying statement for clues about future plans to provide additional economic stimulus.

Earnings news as well as reports on durable goods orders, consumer confidence, pending home sales and personal income and spending as well as the first reading on second quarter GDP may sway sentiment as the week progresses.

U.S. stocks closed lower on Friday as investor sentiment took a hit over rising Sino-American tensions and a lack of progress on another round of federal stimulus.

The Dow Jones Industrial Average shed 0.7 percent, the tech-heavy Nasdaq Composite dropped 0.9 percent and the S&P 500 gave up 0.6 percent.

European markets fell on Friday as increasing global Covid-19 cases, worsening ties between the world's two largest economies and continued uncertainty about trade talks between the U.K. and the European Union dented investor appetite for riskier assets.

The pan European Stoxx gave up 1.7 percent. The German DAX tumbled 2 percent, France's CAC 40 index lost 1.5 percent and the U.K.'s FTSE 100 declined 1.4 percent.