LONDON - European stock indexes rose in early trading on Monday, boosted by investors scaling back their expectations for US Federal Reserve rate hikes and optimism about China's borders reopening.

US jobs data on Friday, which showed a jump in the workforce and easing wage growth, was interpreted by investors as an indication that the Fed can be less hawkish. Global stocks rallied and the dollar dropped.

The upbeat market momentum continued on Monday, with Asian stocks up after China reopened its borders, bolstering the outlook for the global economy. MSCI's broadest index of Asia-Pacific shares outside Japan rose to its highest in more than six months.

At 0811 GMT the MSCI World Equity index, was up 0.5 percent, near its highest since mid-December.

Europe's STOXX 600 was 0.5 percent higher, also near a one-month high and London's FTSE 100 was up 0.2 percent, extending the previous week's gains to hit its highest since 2019.

“The market is reading that wage pressures are easing quite rapidly and seeing that as positive and potentially people whispering the words “soft landing” more loudly now,” said Hani Redha, global multi-asset portfolio manager at PineBridge.

A soft landing is the ideal Federal Reserve policy goal after raising interest rates, a situation in which inflation slows but there are not enough job losses to trigger a recession.

Redha said that there was "over-excitement" in the market reaction to the US jobs data, and that more wage data would be needed.

Money markets were pricing in a 25 percent chance of a half-point hike in February, down from around 50 percent a month ago. Investors will look to Thursday's CPI data for further clues as to the Fed's next move.

The US dollar index was down around 0.1 percent, still near its lowest in seven months after it dropped 1.2 percent on Friday.

The euro was up 0.3 percent at around $1.0673, versus a 1.2 percent jump on Friday.

The Australian dollar - often seen as a proxy for risk appetite - was up 0.8 percent on the day at $0.6928, having touched its highest since late August earlier in the session.

Oil prices climbed by more than 2 percent.

In bond markets, European government bond yields rose, in a reversal after the previous weeks' sharp falls. Germany's benchmark 10-year government bond was up 6 basis points at 2.268 percent.

The 10-year US Treasury yield was up 4 bps at 3.606, also recovering after a sharp drop on Friday.

Earnings season kicks off this week with the major US banks, with analysts fearing no year-on-year growth at all in overall earnings.