European stocks closed slightly higher on Monday, amid mounting speculation the U.S. Federal Reserve could sound decidedly dovish at its policy meeting later this week.

The pan-European Stoxx 600 ended provisionally up 0.22 percent during deals, with most sectors and major bourses in positive territory.

Alongside Europe's banking index, basic resources stocks were among the top performers on Monday morning, up more than 1.6 percent. Shares of Rio Tinto, Anglo American and ArcelorMittal were all firmly higher.

Looking at individual stocks, Deutsche Bank and Commerzbank surged to the top of the European benchmark. It comes after Germany's largest lenders confirmed they were in merger talks over the weekend. Shares of both banks jumped 4.6 percent and 6.8 percent respectively.

Meanwhile, France's EDF slumped towards the bottom of the index after HSBC cut its rating on the stock to "hold" from "buy." Shares of the Paris-listed firm dipped over 1 percent.

The European Union's trade surplus with the U.S. and its deficit with China increased in January, official data showed Monday. The figures serve as potential fuel for trade conflicts between the world's two largest economies amid an ongoing trade war.

The EU surplus in goods trade with the U.S. expanded to 11.5 billion euros ($13.0 billion) in January, from 10.1 billion euros for the same period a year earlier. With China, the EU deficit increased to 21.4 billion euros, up from 20.8 billion euros in January 2018.