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Wall Street set to edge higher; manufacturing data in focus

U.S. stock index futures indicated a higher open Monday as investors reacted to fresh data from China and volatile banking stocks over in Europe.

In Europe, traders were digesting the results of the European Banking Authority's latest stress tests. Banking shares were higher in early trade but quickly reversed gains, although a handful of Italian lenders were in positive territory.

Meanwhile in Asia, new data showed a slowdown in manufacturing activity in China where the official manufacturing purchasing managers' index (PMI), which tracks the health of large and state-owned enterprises, came in at 49.9 in July versus a Reuters poll that predicted a 50.0 reading. The 50-point mark separates expansion from contraction.

A private survey of small and medium-sized companies, released after the official PMI numbers, showed an expansion in activity, however. Nonetheless, Chinese mainland shares sold off following the data and the rest of Asia's markets traded mixed on Monday.

In corporate news, there was confirmation that Uber is to merge its China unit with rival Chinese ride-hailing service Didi Chuxing, in a deal that would value the combined company at $35 billion.

Back in the U.S., manufacturing PMIs are due at at 9:45 a.m. ET and ISM manufacturing and construction spending figures at 10 a.m. ET.