Global markets inched upward on Monday even as investors in Europe went for riskier investments in the hope that last week's disappointing U.S. employment report could signal more stimulus measures from the Federal Reserve. The FTSE 100 index was up 73.87 points, or 1.4 percent, at 5,406.26 while Germany's DAX rose 84.40 points, or 1.4 percent, to 6,344.03. The CAC-40 in France was 57.96 points, or 1.6 percent, to 3,774.01. U.S. stocks were poised to open higher with Dow futures gaining 38 points and the broad-based Standard & Poor's 500 futures rising 3.7 points. The U.S. dollar traded near an eight-month low against the yen as speculation intensified early on Monday that the Federal Reserve could unveil more stimulus measures. However, analysts have said though Friday’s data release indicates that growth in the U.S. remains weak, it is unlikely to have convinced the Federal Reserve to roll in another round of quantitative easing. "A consensus appears to be emerging that if the Fed does announce new measures at its policy meeting on Aug 10 that these are most likely to take the form of a reinvestment into the bond market of proceeds from maturing mortgage backed securities. Insofar as this was first flagged in an article in the WSJ last week it would not shock the market. It would have the additional advantage of not expanding the Fed's balance sheet any further at this stage so strictly speaking it would not be a new round of QE," said Jane Foley, Research Director, FOREX.com. Data released on Friday showed the U.S. economy shed 131,000 jobs in July, double the market expectations. The figures indicated the U.S. recovery was losing steam, ratcheting up market hopes that the Fed will announce further stimulus measures to get the economy back on growth track. The Federal Reserve is due to announce its decision from its one-day meeting on Tuesday. Though further easing of measures is not on the cards, analysts expect the Fed to use more cautionary language while putting out the decision of the Federal Open Market Committee (FOMC). Also, Fed could hint it would employ tools like purchase of bonds to nurse ailing recovery back to health. Bloomberg reported on Monday treasury two-year yields approached an all-time low amid speculation that the Federal Reserve will resume bond purchases this week as it seeks to safeguard the U.S. economic recovery. Fed Chairman Ben Bernanke had hinted as much during his testimony to the U.S. Congress in July. "Two tools for draining reserves from the system are being developed and tested and will be ready when needed. First, the Federal Reserve is putting in place the capacity to conduct large reverse repurchase agreements with an expanded set of counterparties. Second, the Federal Reserve has tested a term deposit facility, under which instruments similar to the certificates of deposit that banks offer their customers will be auctioned to depository institutions," he had said. "...the FOMC continues to anticipate that economic conditions--including low rates of resource utilization, subdued inflation trends, and stable inflation expectations--are likely to warrant exceptionally low levels of the federal funds rate for an extended period, Bernanke had said. The pace of the recovery in the U.S. has been slowing, putting pressure on the central bank to fight off a possible double-dip recession and stem deflationary trends. U.S. GDP grew at a 2.4 percent annual rate in the second quarter, down from a 3.7 percent rate in the first three months of the year.

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