Stocks firm ahead of rate meetings, crude hits $120

Stocks, the dollar and crude oil firmed on Monday as investors positioned themselves for more direction on interest rates and the economy from a string of central bank meetings spilling into next week.

The European Central Bank meets on Thursday, though it is not expected to begin raising interest rates until July, with rate setters at the US Federal Reserve and Bank of England gathering next week.

"There is still some doubt as to whether or not inflation has peaked," said Michael Hewson, chief markets analyst at CMC Markets.

"We are in a bit in a no-man's land at the moment with respect to peak inflation, and also China reopening and the possible tailwinds that might bring. Oil prices are still a headwind and so it's difficult to gain any direction," Hewson said.

The week kicked off with some investor appetite for risk as the MSCI all country stock index gained 0.3 per cent, its recent rebound from near bear-market territory still largely intact.

The STOXX index of 600 European companies gained 0.8 per cent. Blue chips in London were up 1.2 per cent, shrugging off news that British Prime Minister Boris Johnson is to face a confidence vote by lawmakers from his governing Conservative Party later on Monday.

Oil prices firmed after Saudi Arabia raised prices sharply for its crude sales in July, an indicator of how tight supply is even after OPEC+ agreed to accelerate output increases over the next two months.

Brent was up 0.6 per cent at $120.41 a barrel. US crude rose 0.55 per cent to $119.53 per barrel.

Gregory Perdon, co-chief investment officer at Arbuthnot Latham, said investors have to weigh up bearish factors such as inflation, rising rates, war in Ukraine and a higher dollar against still accommodative monetary policy, good though slowing economic growth and Chinese stimulus.

"I think on balance, I do think that risk taking in this environment is going to be more rewarding than betting against risk assets," Perdon said.

S&P 500 futures added 1 per cent and Nasdaq futures 1.4 per cent, pointing to a higher open on Wall Street.

Shares in Asia-Pacific gained 0.6 per cent, while the Nikkei in Japan rose 0.6 per cent.