World equities and oil prices eased on Monday as some investors booked profits after last week's strong gains, but optimism over the global growth outlook limited the falls.
Data from the United States on Friday showed employers kept up a steady pace of hiring in December and its vast services sector was expanding at a brisk rate, while manufacturing surveys pointed to growing activity in China.
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This compounded the boost to markets last week when U.S. lawmakers averted a budget crisis, at least for the moment.
"There is a lot of optimism in the market because the U.S. 'fiscal cliff' has been avoided, Europe's debt crisis has eased and the Chinese economy seems to be growing again," said Koen De Leus, senior economist at KBC Group.
The FTSE Eurofirst <.FTEU3> index of top European shares was little changed near its 22-month high hit last week, while the MSCI's broad world equity index <.MIWD00000PUS> dipped 0.1 percent but remained close to an 18-month peak.
Financial shares outperformed the broader market after global regulators relaxed plans for tough new liquidity rules on Sunday. The STOXX 600 European banking index <.SX7P> was up by 1.2 percent.
"The move gives the banking sector some breathing space, which would be good for the economy as a whole," De Leus said.
Brent crude oil futures slipped 40 cents to $110.89 per barrel after rising 0.6 percent last week.
Investors were beginning to look to the first policy meetings of the year at the European Central Bank and Bank of England on Thursday when no rate moves are expected but new euro zone forecasts are due.
Some analysts expect the ECB to point to the chances of an easing in rates early this year, a week after the U.S. Federal Reserve indicated it may pursue less accommodative policies in future. More immediately, the Bank of Japan is set to take major steps to stimulate the country's economy as the new government aims to end deflation and recession.
The possibility of less monetary stimulus in 2013 from the Fed and more from the Bank of Japan sent the dollar to a two-and-a-half year peak against the yen last week but profit taking saw it ease on Monday by 0.5 percent to 87.75 yen.
Against the euro, the dollar gained 0.3 percent to $1.3030.
In the European bond markets German Bund futures rose 0.4 percent after their steep falls last week with investors focused on auctions by Spain and Italy later in the week.
Last week's revelation of a more cautious Fed attitude to further monetary stimulus will put much attention on 10- and 30-year U.S. Treasury debt sales this week.
(Additional reporting by Atul Prakash; editing by David Stamp)