By Peter Nurse

Investing.com - European stock markets traded higher Monday, helped by a bounce on Wall Street, but investors will be on edge this week ahead of the expected resumption of an important gas pipeline as well as a key meeting of the European Central Bank.

By 03:25 AM ET (0725 GMT), the DAX in Germany traded 0.7% higher, the CAC 40 in France rose 0.7%, and the U.K.’s FTSE 100 climbed 1.1%.

The main European indices are building on Friday gains, helped in particular by the strong gains on Wall Street, with the blue-chip Dow Jones Industrial Average gaining over 650 points, or 2.2%, as investors bet that the Federal Reserve will be less aggressive at its upcoming meeting than previously feared.

However, these gains may prove harder to come by as the week progresses, with the European Central Bank meeting on Thursday. This gathering is expected to see the bank raise rates for the first time in a decade as it attempts to curb soaring inflation, the latest illustration of which is due on Tuesday with Eurozone CPI numbers for June.

Beyond the interest rate decision and ECB President Christine Lagarde’s press conference, the meeting is expected to shed light on the bloc’s new tool to keep country-level bond yields from spiraling too high.

Also creating tensions in Europe are worries over whether Russia resumes the flow of gas through the Nord Stream 1 pipeline, while Italy teeters on the brink of political turmoil should Prime Minister Mario Draghi press ahead with his resignation.

In corporate news, Deliveroo (LON:ROO) stock fell 1.4% after the food delivery group slashed its guidance for 2022, citing a sharp slowdown in order volume growth in the second quarter, the latest stark illustration of the cost-of-living squeeze on consumer spending.

Nordea (HE:NDAFI) stock rose 2.2% after the Finnish bank posted a rise in second quarter operating earnings, well above market expectations aided by growth in earned loan interests.

H&M (ST:HMb) stock fell 0.8% after the world's second biggest fashion retailer said it had decided to wind down its business in Russia, joining a growing list of companies fully exiting the country.

Oil prices rose Monday, helped by the continuing tight global supply after U.S. President Joe Biden's trip to Saudi Arabia failed to yield any pledge from the top OPEC producer to boost oil supply.

Attention this week will be on the scheduled resumption of Russian gas flows to Europe via the Nord Stream 1 pipeline on July 21, when the current maintenance stoppage is due to end, amid fears the shutdown may be extended because of the war in Ukraine.