U.S. equities were also poised to open lower after a gloomy start to the second quarter earnings season although investors were cautious ahead of U.S. Federal Reserve Chairman Ben Bernanke's two-day congressional testimony beginning Tuesday.
They are waiting to see if he hints at new monetary policy steps to support the U.S. economy after central banks from Europe, China and Brazil earlier this month cut interest rates to bolster fragile growth.
An index of U.S. sentiment on Friday pointed to a slowdown in consumer spending and June jobs data disappointed earlier in the month, adding to evidence that the U.S. recovery is slowing.
"2012 is turning out to be a slightly worse year for the U.S., for China and for Europe," said Sarah Hewin, senior economist at Standard Chartered in London.
"We're seeing the three large regions of the (global) economy all experiencing below potential growth and, in the case of Europe, we think we'll see a recession for the year as a whole," she said.
The euro was broadly weaker on fears that further delays to the mobilization of bailout funds to troubled debtor states could hurt efforts to tackle the region's debt crisis.
Europe's common currency was down 0.5 percent against the dollar at $1.2190, and fell to a six-week low versus the Japanese yen of 96.10 yen. It hit a 3-1/2 year low against sterling of 78.44 pence.
Financial markets had been expecting a quick ruling from Germany's Constitutional Court on whether the euro zone's bailout fund, the European Stability Mechanism (ESM), is compatible with German law but the court said on Monday the verdict would not come until September 12.
"This adds to the uncertainty about the ability of the euro zone officials to respond adequately to any potential further deterioration of the debt crisis," said Valentin Marinov, Director of FX Strategy at CitiFX.
The euro was also hurt by a report suggesting a change in the European Central Bank's stance on how some bondholders could be treated under Spain's bank bailout.
The Wall Street Journal said ECB President Mario Draghi advocated imposing losses on holders of senior bonds issued by the worst hit Spanish savings banks.
The ECB declined to comment on the report, which also said finance ministers rejected the advice due to concerns financial markets would react badly to such a decision.
The final terms of the 100 billion Spanish bank bailout package are expected to be agreed by euro zone finance ministers this Friday, while the German parliament votes on whether to approve the deal on Thursday.
German debt, which has been a shelter from the rise in yields on Spanish and Italian bonds, extended a week of gains on Monday with confidence the bank bailout would resolve the problems facing Spain beginning to ebb.
Germany's 10-year bond was yielding around 1.24 percent, down 1.5 basis points, while Spanish 10-year bond yields were 11 basis points higher at 6.77 percent. Equivalent Italian bonds gained 7 basis points to yield just over 6.0 percent.
The MSCI world equity index .MIWD00000PUS was fractionally lower at 309.27 points despite Asian shares having posted a stronger session after gross domestic product data on Friday suggested China may not face an economic hard landing.
Benchmark emerging stocks .MSCIEF were steady after a strong recovery on Friday, but were trading more than 1 percent above two-week lows set last week.
European shares were little changed in a choppy trading session with investors reluctant to push the market higher after six weeks of gains leaving the FTSE Eurofirst 300.FTEU3 index of top European shares virtually flat at 1042.71 points.
Brent oil gained after China's Premier Wen Jiabao said the government would step up efforts to boost the economy.
"It is a combination of two factors -- China's growth coming in line with expectations and hopes for more measures to boost the economy," said Ben Le Brun, a markets analyst at OptionsXpress.
Brent futures were up 15 cents to $102.55 a barrel, although U.S. oil was down 38 cents to $86.72 a barrel.
Gold prices were easier in line with the weaker euro and equity markets as investors awaited Bernanke's semi-annual monetary policy report.
The precious metal slipped towards $1,580 an ounce, surrendering the gains it made on Friday when it put in its best one-day performance in more than a week.