World stocks, the dollar and oil all saw modest falls on Monday as investors locked in some recent gains ahead of central bank meetings in the United States and Japan this week.
Asia and Europe both sank as Tokyo gave back 0.8 percent of the 4 percent it had made last week and 3 and 1.5 percent falls for miners and oil firms pushed the FTSEurofirst 300 down for a third straight day.
As well as signs the 3-month rally in stocks and commodities markets is cooling, a U.S. Federal Reserve rate decision on Wednesday and the Bank of Japan meeting on Thursday meant there was little incentive for traders to be bold.
Talk has been that Japan could push deeper into negative interest rate territory, while there is intense interest on where the Fed currently stands on another rate hike.
"Central banks are still the name of the game," said Nordea's chief strategist for developed markets, Jan von Gerich.
"There is a chance that the Fed could surprise with a bit of hawkishness on Wednesday. The dollar hasn't really strengthened and the S&P 500 is back near its all-time high, so they could certainly test the market."
The dollar index was trading 0.2 percent lower on the day at 94.963. Against the euro, it dipped to $1.1270, at the weaker end of a 10-cent range it has held for a year, while the yen rose to 111.24 after a walloping at the end of last week.
Britain's sterling, meanwhile, had hit its highest in over a month after a UK media blitz from President Barack Obama calling for Britain to stay in the European Union saw bookmakers lengthen the odds of a Brexit vote in June.
"If one of our best friends is in an organization that enhances their influence and enhances their power and enhances their economy, then I want them to stay in it," Obama said.
The subdued start to the week for Europe's stock markets, was further compounded by an unexpected fall in German business morale data.
The Munich-based Ifo economic institute said its business climate index, which surveys around 7,000 firms, dipped to 106.6 in April compared to a forecast of a rise to 107.0.
One of IFO's top economist said the mood in the German economy was still good, however, albeit not euphoric.
BOJ Meeting
The jittery mood sent investors back into government bonds, having largely shunned them for the last couple of weeks.
Bund yields fell a fraction but remained above 0.2 percent having ended Friday with their biggest weekly rise since last December.
In Asia overnight, Chinese shares had continued their recent poor run as the blue-chip CSI300 index and Shanghai Composite Index slipped 0.5 and 0.6 percent respectively.
Japan's Nikkei ended down 0.8 percent as the yen pulled off its lows. MSCI's benchmark 23-country emerging market index dropped roughly the same as it saw its second consecutive session of falls.
Japan's central bank on Thursday is likely to cut its price forecasts and debate whether a strong yen, weak global demand and soft consumption have hurt inflation expectations enough to warrant another hit of stimulus.
"We've had a strong 20 days and now is the point where the index will break out or move sideways in anticipation of further catalysts," said Martin King, co-managing director at Tyton Capital Advisors.
Among commodities, crude oil prices slipped after rising on Friday and notching their third straight week of gains as market sentiment turned more upbeat amid signs a persistent global supply glut may be easing.
Brent fell 1 percent to $44.64 a barrel, while U.S. crude shed 1.3 percent to $43.16.
Shanghai aluminum futures jumped to their highest level in nearly 10 months amid optimism about a demand pick-up up in China, while gold ticked higher as the dollar receded.