Following recent losses, stock markets are anticipated to open slightly higher on Monday, with attention on the German Ifo business climate index as a measurement of the health of the largest economy in the Eurozone. 

After the European Central Bank slowed the pace of its interest rate hikes but emphasised that further tightening lay ahead as it battles rising inflation, European markets suffered hefty losses last week, with the German DAX about 3% lower. 

Klaas Knot, a member of the ECB's governing council, stated on Friday that while the central bank has a longer distance to go before hiking interest rates than the Federal Reserve, it eventually won't do so to the same extent. 

The prospect of further interest rate increases and the likelihood of sluggish economic growth have dampened market morale, although later in the day, the German Ifo business climate index for December is expected to show some improvement. 

The revelation comes after last week's PMI data revealed that the decline in German economic activity has slowed for a second straight month, suggesting that the bloc's inevitable recession will be shorter than originally anticipated. 

Investors will be watching comments made by ECB Vice-President Luis de Guindos in Madrid later on Monday for additional hints about the policymakers' thinking. 

In business news, Germany is also prepared to assume the risks linked with the €216 billion in derivatives that energy giant Uniper has amassed as it tries to nationalise the firm that has been severely impacted by the region's energy crisis. 

Furthermore, the Biden administration's decision to start replenishing its strategic stockpiles and the expectation of rising Chinese demand in the coming year both helped drive up the price of crude oil on Monday. 

After reducing the Strategic Petroleum Reserve to its lowest level in over 40 years in an effort to stop this year's fuel price hikes, the U.S. government announced on Friday that it will first purchase 3 million barrels of oil for its reserve. 

Additionally, China has dropped its tight "COVID-zero" policy, and while the second-largest oil user and top importer of crude oil globally is seeing an increase in new cases as it reopens, there is growing optimism that economic activity will pick up in 2023. 

(Sources: investing.com, reuters.com)