European Markets Head for Mostly Higher Open, Brushing Off New U.S.-China Trade Spat

LONDON — European stocks are expected to open mostly higher as the new trading week begins and traders keep a close eye on a trade dispute brewing between the U.S. and China.

The U.K.'s FTSE index is seen opening just below the flatline, Germany's DAXup 0.3%, France's CAC 40 up 0.26% and Italy's FTSE MIB up 0.54%, according to data from IG.

The positive start to the week comes after a dour close for regional bourses last week after U.S. President Donald Trump threatened China with a fresh wave of tariff increases to "financially counter" new export controls that China imposed on rare earth minerals.

China controls about 70% of the global supply of rare earths minerals, which are critical for high-tech industries, including automobiles, defense and semiconductors.

Trump appeared to suggest in a Truth Social post on Sunday that he might not follow through on his threat, however, posting that trade relations with China "will all be fine."

On Sunday, China said "we are not afraid of" a trade war with the U.S. and a spokesperson for the Ministry of Commerce accused it of a "double standard" with Trump's promise on Friday to tack on additional 100% tariffs on Chinese imports.

Asia-Pacific markets fell overnight, as investors kept an eye out for any fallout from the renewed China-U.S. trade tensions. Meanwhile, U.S. stock futuresrose Sunday night, rebounding from Friday's sell-off after Trump's attempt to reassure markets that there wouldn't be a new trade war.

There are no major earnings or data releases on Monday but we'll have the latest financial reports from the likes of ASML, LVMH and Nestle this week as third quarter earnings season begins.

Investors will also be watching for news from the IMF and World Bank annual meeting in Washington this week.

— CNBC's Dan Mangan and Victor Loh contributed to this market report.