By Joao Manuel Vicente Mauricio

(Reuters) – European shares inched up on Friday, ahead of U.S. payrolls data that could sway expectations around the Federal Reserve's policy move later this month, while investors continued to monitor political developments in France.

The pan-European STOXX 600 was up 0.2% by 0936 GMT, on track for its seventh consecutive day of gains and set for its best weekly performance in ten.

French assets saw a relief rally after President Emmanuel Macron said he will appoint a new prime minister in the coming days whose top priority will be getting a 2025 budget adopted by parliament, after the government was toppled by lawmakers.

The country's benchmark CAC 40 index rose 1.2% to touch a fresh three-week high.

A gauge of European luxury stocks jumped 1.5% to its highest in over a month, boosted by Italy's Moncler, which rose 5.5% after Goldman Sachs upgraded its shares to "buy".

The market's focus will be on the highly anticipated U.S. payrolls data for November, scheduled for 1430 GMT, that could alter the odds of a Fed rate cut this month. Traders are currently pricing in a 68% chance of such a move.

"It's very much a let's see what happens next in France and focus on the U.S. non-farm payrolls," said Fiona Cincotta, senior market analyst at City Index.

"We are going to be seeing solid jobs growth, but nothing too extreme that's going to unnerve the Fed or the market as far as expectations surrounding a December rate cut are concerned," she added.

Among other movers, Direct Line (LON:DLGD) rose 7% after the British insurer said it was set to recommend a sweetened 3.61 billion pound ($4.60 billion) cash-and-stock takeover by Aviva (LON:AV), if the bigger rival makes a formal offer.

Puig Brands fell 3.5%, having shed as much as 9% earlier, after the Spanish cosmetics company said its Charlotte Tilbury brand was conducting a global withdrawal for select batches of its make-up setting spray.

BMW (ETR:BMWG) rose 1.6% after Jefferies upgraded the German automaker's stock to "buy" from "hold".