(RTTNews) - European shares are likely to begin trading flat to modestly lower on Monday as the intense standoff between Israel and Iran moves into its fourth day following renewed missile strikes overnight.

Israeli forces stated that their strikes on Iran destroyed several important targets. Iranian officials reported harm to four key structures at the Isfahan uranium conversion site.

U.S. President Donald Trump indicated to reporters at the White House on Sunday that he sees a chance for Israel and Iran to agree on ending hostilities, even if combat persists ahead of any settlement.

At the same time, global leaders are set to discuss the Ukraine war and the escalating Middle East situation during a major international summit in Canada.

British Prime Minister Keir Starmer noted that additional measures against Moscow would almost certainly feature in summit discussions this week should the Kremlin reject demands for an unconditional ceasefire.

Attention is also fixed on multiple central bank policy announcements scheduled for this week. The Bank of Japan convenes on Tuesday and is expected to maintain rates at 0.5 percent while signaling possible tightening later in the year.

The Swiss National Bank gathers on Thursday and is projected to reduce rates by at least a quarter point.

The Federal Reserve reveals its decision on Wednesday, with markets seeking clues on potential U.S. rate cuts in the months ahead.

Central banks in Norway and Sweden are likewise due to release their interest-rate rulings this week.

Asian markets traded mostly higher following mixed economic figures from China, where factory output growth reached a six-month low in May even as retail sales strengthened.

The dollar remained stable in Asian dealings and yields rose modestly, while oil prices climbed nearly 1 percent after a 13 percent jump last week. Gold eased slightly and stayed below $3,430 per ounce.

U.S. stocks dropped sharply on Friday after a lethal Israeli attack on Iranian nuclear sites and Iran's response raised regional tensions in West Asia.

On the data front, a gauge of U.S. consumer sentiment posted its largest gain since January 2024 and near-term inflation expectations improved noticeably.

The Dow fell 1.8 percent, the tech-focused Nasdaq Composite dropped 1.3 percent and the S&P 500 slipped 1.1 percent.

European stocks finished lower on Friday as rising Middle East tensions overshadowed positive inflation readings from Germany and France.

The broad STOXX 600 index fell 0.9 percent and briefly touched its lowest point in three weeks.

Germany's DAX declined 1.1 percent, France's CAC 40 lost 1 percent and the U.K.'s FTSE 100 eased 0.4 percent.

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