NEW YORK Oil prices hovered near three-month lows while a key gauge of world stock indexes advanced on Monday as investors braced for a busy week for global markets, including a potential U.S. interest rate hike by the Federal Reserve.
The dollar steadied against a basket of currencies .DXY after touching a two-week low.
Friday's strong U.S. employment report solidified a view among Wall Street's top banks that the Federal Reserve will boost interest rates when its policy makers meet this week.
"Right now, the markets appears to be in a wait-and-see phase ahead of the Fed decision," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
MSCI's all-country world stock index .MIWD00000PUS rose 0.2 percent.
U.S. stocks were little changed ahead of the expected Fed rate hike later this week.
The Dow Jones Industrial Average .DJI fell 34.76 points, or 0.17 percent, to 20,868.22, the S&P 500 .SPX lost 1.7 points, or 0.07 percent, to 2,370.9 and the Nasdaq Composite .IXIC added 9.02 points, or 0.15 percent, to 5,870.74.
Corporate deal-making continued as chips giant Intel (INTC.O) said it would acquire driverless technology firm Mobileye (MBLY.N) for $15.3 billion. Mobileye shares jumped 30 percent.
In Europe, Amec Foster Wheeler (AMFW.L) rallied 13 percent after oil services company Wood Group (WG.L) agreed to buy the company for $2.7 billion.
The pan-European STOXX 600 index gained 0.4 percent, helped by increases in mining shares.
Aside from the Fed meeting, which starts on Tuesday, the world's most powerful finance ministers and central bankers convene in the German town of Baden Baden starting on Friday, their first meeting since Donald Trump won the U.S. election.
Oil prices hovered around three-month lows, as rising U.S. inventories and drilling activity offset optimism over OPEC's efforts to restrict crude output.
U.S. crude CLc1 fell 0.1 percent to $48.43 a barrel, and touched its lowest point since Nov 30. Brent crude LCOc1 edged up 0.1 percent to $51.42 a barrel.
The dollar edged up 0.02 percent against a basket of key world currencies, recovering after Friday's bout of profit-taking following the robust U.S. jobs report.
"We remain bullish on the dollar, but as Friday's events suggested, a lot of good news is already priced into the dollar at current levels," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.
Sterling, which has been one of the worst performers against the dollar over the last two weeks, rose 0.5 percent after the devolved Scottish government demanded the right to hold a new referendum on independence.
U.S. Treasury yields edged higher in anticipation of Fed rate hike on Wednesday, nervousness that the central bank could indicate a more aggressive pace of future rate hikes, and new corporate bond supply.
Prices for benchmark 10-year Treasuries US10YT=RR slipped 2/32 to yield 2.589 percent, from a yield of 2.582 percent late on Friday.
Spot gold XAU= edged up 0.02 percent, but remained near 1.5-month lows.