European stocks close:

European stocks climbed, posting their biggest three-day rally this year, amid optimism central banks will add to stimulus measures and as a report showed that U.S. factory orders rebounded in May.

The European Central Bank and the Bank of England will announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 62 economists. Five predicted a cut of 50 basis points and 11 foresaw no change.

The People’s Bank of China may cut lenders’ reserve requirements to increase liquidity in the banking system, according to a commentary on the front page of today’s China Securities Journal, which is published by the official Xinhua News Agency. The central bank announced a cut to interest rates on June 7, a day after the newspaper published a commentary urging the move.

National benchmark indexes gained in every western-European market. France’s CAC 40 advanced 1 percent and the U.K.’s FTSE 100 increased 0.8 percent. Germany’s DAX rose 1.3 percent.

Peugeot climbed 3.7 percent to 7.72 euros as Europe’s second-biggest carmaker plans to eliminate as much as 10 percent of its French workforce to reduce operational costs, a union official said. Peugeot may discuss its plans for the reorganization at its next works council meeting on July 12.

Swiss Re Ltd. rose 1.7 percent to 61.10 Swiss francs after BlackRock Inc. said it will buy Private Equity Partners AG from the world’s second-biggest reinsurer and integrate the business with its own fund-of-funds division.