Global markets strengthened overnight, although U.S. stocks pared their gains late amid caution ahead of this week's Fed meeting.

European stocks rose to a one-week high, rebounding from their longest streak of weekly losses in 14 months, as investors awaited this week's Federal Reserve meeting for signs on the pace of stimulus reduction.

The Stoxx 600 rose 0.7% to 293.25 at the close of trading, for the first back-to-back gains this month.

In London, the FTSE 100 gained 22 points (+0.4%) to finish trading at 6330 while the German DAX added 88 points (+1.1%) to close the trading session at 8216.

U.S. stocks rose, with the S&P 500 rebounding from last week's decline, as investors weighed economic data with the prospects for stimulus cuts ahead of this week's Fed meeting.

The S&P 500 rose by 12 points (+0.8%) to finish at 1639 after earlier gaining as much as 1.2%. The Dow Jones added 110 points (+0.7%) to close at 15180.

Manufacturers in the New York region felt more optimistic in June even as orders, sales and employment dropped, indicating the area's factories are looking beyond the current slowdown in growth.

Crude oil slipped on speculation that the Fed may curb stimulus after the report on the optimism by the New York manufacturers was released.

July oil delivery settled at $97.77 a barrel on the New York Mercantile Exchange, little changed from the four-month high of $97.85 in the previous session.

Gold declined as investors weighed when the Fed will taper asset purchases. Bullion futures for August delivery lost 0.3% to settle at $1,383.10 an ounce on the Comex in New York.

The Reserve Bank of Australia will release its Monetary Policy Meeting Minutes today at 11:30 am.

Morning Market Update: Strong Start Ahead is a post from: Australian Stock Report Market Pulse Blog