European stocks traded lower across the board Monday as bank stocks suffered but the U.S. dollar looks set to resume its rally and oil prices remain active.

Britain's FTSE 100 dipped 38 points by 11:30 GMT, falling 0.6% to 6,798 points as oil and financial stocks held down gains. Germany's DAX performance index fell 88 points, or 0.8% while France's CAC-40 slid 0.7% to trade at 4,515 points.

One of the early movers of note in Europe were shares of Aberdeen Asset Management, Europe's third biggest fund, which rose more than 4% at the bell to 297 pence each despite reporting a full-year drop in profit as client outflows slowed. Investors pared gains in the stock to 2.3% by 11:30 GMT.

Bank stocks in Italy fell sharply as traders reduced holdings ahead of a key national referendum on constitutional reform that could topple the government and spark major changes for Europe's third-largest economy.

Monte Dei Paschi di Siena (BMDPY) , the country's third largest lender, fell more than 7.5% in the opening half hour of trading before having its shares suspended from trading in Milan. Shares in Unicredit, Italy's biggest lender, fell 3.96% to €1.89 each, extending the year-to-date decline to 65%. The bank is hoping to raise as much as €13 billion next year in order to shore up its finances and offset bad debts on its balance sheet.

The FTSE Italy Banks index, the broadest measure of share performance for the country's lenders, was down 3.45% by 09:30 CET in Milan while the FTSE MIB index fell 245 points, or 1.5%.

The U.S. dollar once again dominated the direction of trade in the region, however, as traders pulled back on the rally and priced the greenback lower against a basket of six global currencies in early trading before bidding it back as the session continued. It was last marked at 101.22  at 11:30 GMT.  

Oil markets continued their volatile daily trading in Europe with Brent crude for January delivery rising 0.34% to $47.96 by 11:30 GMT and West Texas Intermediate Crude on the Nymex exchange up 0.4% to $46.02 as traders continued two-way bets on OPEC leaders reaching an agreement on production cuts at their Wednesday meeting in Vienna.

Currency markets in Europe also reflected the dollar sell-off, with the pound rising in early trading before dipping 0.36% to 1.2440 and the European single currency adding 0.56% to trade at 1.0643.

Bond markets are expected to be active again in Europe as traders pick through a series of political risk events this week, culminating with what is expected to be a crucial senate reform referendum in Italy this Sunday.

German bund futures edged 31.5 points higher to 162.13 while benchmark 10-year bund yields were marked 4 basis points lower at 0.20% amid extended bets that the European Central Bank will continue its €1.5 trillion quantitative easing program past the March 2017 deadline. 

However, news of a decisive win for Francois Fillion in yesterday's primary for conservative candidates in France's spring Presidential elections will certainly provide ample trading opportunities. The reformist candidate took two-thirds of the second-round vote and is now expected to face far right leader Marine Le Pen in next year's elections. Benchmark 10-year bonds from France, known as OATs, were marked 4 basis points lower Monday at 0.76%.

Traders will also likely key on testimony later Monday from European Central Bank President Mario Draghi to the European Parliament's Committee on Economic and Monetary Affairs in Brussels.

Early indications from U.S. futures prices suggest a 60 point fall at the open for the Dow Jones Industrial Average, a 9 point decline for the S&P 500 and 12.5 point fall for the Nasdaq. 

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