China PMI lifts shares, commodities, euro soft ahead of ECB

By Marc Jones LONDON (Reuters) - Reassuring Chinese factory data and another record high for Wall Street lifted world stocks and commodities on Monday, as markets waited to see how far the European Central Bank will go with policy easing plans this week. China's manufacturing activity expanded at the fastest pace in five months in May, data showed on Sunday, reinforcing views that the world's second-largest economy is regaining momentum after a wobble at the start of year. Basic resources stocks including miners and other commodity companies were the biggest gainers as the main bourses in London and Frankfurt started what is set to be a busy week for markets on a positive note. [.EU] After weeks of speculation about interest rate cuts and additional unconventional policy easing measures, the ECB meets on Thursday with expectations running extremely high. The euro fell 0.15 percent to $1.3610, not far from a three-month low of $1.3586 touched on Thursday. It also fell against the pound to 81.25 pence, with diverging monetary policy outlooks between the ECB and the Bank of England, which also meets this week, underpinning the British currency. Ahead of the ECB meeting, German inflation data for May due at around 1200 GMT will be closely watched. The ECB is increasingly concerned that extremely low inflation could be becoming entrenched in the euro zone.