Concern about plans for a fundamental review of the bailouts given to Europe's high debtors dominated debt markets on Monday although the euro itself rose, rebounding from recent sharp losses.
Europe stocks recovered from early losses and commodity prices firmed, bouncing back from their biggest weekly drop since 2008 as the dollar eased back.
Focus in Europe was on the state of debt in the euro zone's peripheral economies following an unusual and secretive meeting of selected financial officials on Friday who discussed the need for new adjustments to Greece's aid program.
It was not clear to what extent such a move would also trigger adjustments to repayment plans in Ireland and Portugal, the two other countries that have sought aid for their debt.
An Irish minister said any concession to Athens should mean better terms for Dublin as well.
Rumors about a full-on restructuring of Greek debt have roiled European markets for several weeks now.
Yields on Greek and Portuguese debt rose, with five-year Greek paper offering 22 percent.
The cost of insuring Greek, Irish and Portuguese debt against default also rose, with investors increasingly concerned Greece may have to restructure is debt.
By contrast, yields on core euro zone bonds fell as investors bought into their relative safety.
Traders said the market was reacting to a lot of noise -- suggesting that investors wanted clarity on what was happening in the euro zone.
Amid the uncertainty, the FTSEurofirst 300 <.FTEU3> stock index opened lower but then clawed back to be flat on the day.
The MSCI all-country world stock index <.MSCI00000PUS> was down slightly, hurt by a two-thirds of a percent loss in Japan <.N225>. Emerging market stocks <.MSCIEF> were up 0.1 percent.
The euro bounced back, scooped up by sovereign investors after last week's steep drop, which was brought on both by an apparent delay in the European Central Bank's next tightening and by dollar-boosting U.S. jobs data, which came in stronger than expected on Friday.
The rebound in various commodity prices after their rout last week also helped to pull up the euro from a three-week low.
The bounce has seen the euro rise past $1.44, but the market is a bit cautious given the overextended position in currencies, said Paul Mackel, director of currency strategy at HSBC.
The euro gained 0.8 percent to $1.4430, after a 3.3 percent fall in the past two sessions took it to a three-week low around $1.4310.
The dollar was down half a percent against a basket of major currencies <.DXY>.
This, along with the better U.S. economic data, helped demand for commodities, which are priced in dollars.
Brent crude futures rose $2 to $111.13 a barrel as the dollar weakened and some traders and investors went bargain hunting after last week's sell-off.
Spot gold rose more than one percent, following its biggest weekly loss since the first quarter of 2009 and silver, copper and wheat also rose.
(Additional reporting by Aniriban Nag and Marius Zaharia, editing by Mike Peacock)