European stock markets rose on Monday and some hit multi-month highs as the dollar steadied and U.S. crude oil prices held below $50 a barrel.

Euro zone government bond prices eased after bullish consumer spending data from France and as the euro's record run lost a bit of momentum.

The FTSEurofirst 300 index firmed 0.73 percent to around 1,036.12 points, just off its recent 28-month high, while the Xetra DAX jumped to a year high.

U.S. stock index futures pointed to a strong start on Wall Street.

Signs that China is in no rush to let its pegged currency appreciate against the dollar gave some support to the greenback, which has shed nearly 9 percent against the euro and the yen in the last two months.

Speaking on Sunday, Chinese Premier Wen Jiabao played down the likelihood of a yuan revaluation in the near term and questioned why U.S. policymakers had taken no action to stem the dollar's fall.

"The comments from China have given the dollar some support against Asian currencies, but the bear trend is very much in place," Paul Mackel, a foreign exchange strategist at ABN AMRO, said.

The dollar was up 0.3 percent at 102.86 yen and 0.2 percent $1.3260 per euro, a shade above Friday's record low of $1.3329.

The greenback's sustained slide is reverberating across the markets.

U.S. crude oil futures were up 3 cents at $49.47 a barrel in their first day of trade since last Wednesday, up 51 percent on the year.

But this was not giving OPEC (news - web sites) producers much comfort due to the dollar's steep decline and some members have suggested clamping down on around 900,000 barrels per day of quota-busting production when the cartel meets in Cairo on Dec. 10.

"A 53 percent rise in the headline dollar price of WTI (West Texas Intermediate benchmark crude) has been accompanied by a rise of just 2 percent in the euro value of the OPEC basket (of crude oil)," Barclays Capital noted in a note to clients.

SHARES RALLY

The persistent weakness of the dollar also dominated share market attention in recent sessions and the latest rebound helped the benchmark German DAX index soar 1.36 percent to a year high.

Shares in HVB Group rose more than 3 percent on hopes that an expected board reshuffle would address the ills of its German banking business.

Britain's FTSE 100 rose to a 1-week high and was pushing toward its 29-month high, helped by gains to the heavyweight banking, oil, telecoms and drugs sectors.

A decision on Sunday by the board of Dexia to call off merger talks with Italy's Sanpaolo IMI ended the prospect of Europe's biggest cross-border bank merger.

Euro zone government bond yields rose as traders focused on the euro with stronger-than-expected consumer spending in France also helping to keep bond prices down.

The interest rate sensitive two-year Schatz yield was up 2.8 basis points at 2.34 percent, close to more than 7-month lows hit on Friday at 2.303.

The benchmark 10-year Bund yield was up 2.1 basis points at 3.78 percent.

French consumer spending rose 0.9 percent month-on-month, and 2.1 percent from October 2003.

Tokyo's Nikkei average rose 1.33 percent on strong gains in steel and shipping firms while the yen stalled in its rise against the dollar.

Other Asian stock indexes such as the Kospi, Hang Seng, and Straits Times were also broadly firmer.

Spot gold prices were in retreat at around $450.50 a troy ounce after hitting a fresh 16-1/4-year high on Friday as the dollar rebounded.