European shares were set to open steady on Monday as oil prices tick lower and the dollar hits a two-week high, while drug makers Novartis and Schering could weaken as they delay a drug filing.
Italy's banks face a pivotal week after Spain's Banco Bilbao Vizcaya Argentaria and Dutch group ABN ARMO threw down the gauntlet over the Bank of Italy's restrictions on foreign takeovers in the sector.
Markets expect the U.S. Federal Reserve to raise rates by 25 basis points to 2.75 percent at its policy meeting on Tuesday, but focus will be on indications of the pace of future rises.
The March German Ifo business climate survey due on Wednesday will be eyed for further insight into the state of the euro zone economy and its implications for monetary policy.
Financial bookmakers in London expect the FTSE 100 , the CAC-40 and DAX indexes to open 2 to 6 points lower.
The FTSEurofirst 300 index of leading European shares ended firmer on Friday, led by gains for oil companies and miners, as commodity prices near record highs stoked expectations of strong earnings.
U.S. blue chip stocks ended a touch higher on Friday but the Nasdaq closed at a 2005 low, capping a choppy session as the long-awaited rebalancing of the Standard & Poors's index was combined with quarterly options expirations.
U.S. treasury debt fell on Friday as an easing of credit quality worries cut short this week's rally and allowed inflation fears to creep up again. Benchmark U.S. 10-year yields were trading at around 4.511 percent in early Asian trade, little changed from the U.S. close.
Comparable 10-year European government bonds yielded 3.698 percent.
U.S. crude oil futures ticked lower but held above $56 on Monday as the IMF forecast energy costs to stay high for at least two years, while top exporter Saudi Arabia said OPEC could decide at any time to add more supply to the market.
The dollar rose about half a percent against the euro on Monday to its highest level in nearly two weeks on speculation the U.S. Federal Reserve may adopt more hawkish language on interest rates this week.
The Tokyo stock market was closed for a national holiday.
Other Asian indexes such as the Kospi , Hang Seng and Straits Times were slightly lower.
Gold prices fell in Asian trading on Monday and hovered near their lowest levels in 10 days, as the U.S. dollar rose on expectations the Federal Reserve may hasten the pace of interest rate hikes.