European stocks claw back ground as markets steady LONDON (Reuters) - European stocks, bonds and the dollar traded more calmly on Monday after last week's turbulence, though another 3 percent dive in Japan's Nikkei kept investors on edge. While evidence mounts that a mid-year slowdown is taking place in the world economy, UK and U.S. holidays kept European equity and bond markets quieter than usual. The FTSEurofirst 300 index of top European shares gained 0.3 percent as last week's falls tempted buyers, while demand for safe-haven 10-year German government bond futures eased and Italian and Spanish bonds strengthened. The dollar was steadier, though it dipped to below 101 against the yen as the latest lurch in Japanese equities encouraged investors who have been unwinding their dollar hedges and heading for bonds. The 3.2 percent drop on Tokyo's Nikkei brought its losses since Thursday to more than 10 percent, though it is still up 35 percent this year. "Markets are currently experiencing difficulty fully and precisely understanding both the pace of global growth and the implications of central banks' activism," Credit Agricole said in a note. "Expectations cannot remain stable for long and so investors should be prepared for periods of higher volatility in particular asset classes," they added. In commodity markets, Brent crude slipped towards $102 per barrel, extending last week's 2 percent drop, as a weak economic outlook in a well-supplied market pressured prices. The broader market nerves also helped gold firm to 1392.75 an ounce as it built on last week's best run in a month and growth-attuned copper fell 0.2 percent. The latest shakeout of equity, bond and currency markets has been triggered by concerns the U.S. Federal Reserve could wind in its support sooner that had been expected, weak China data and doubts over how low Japan will allow the yen to go. The European Central Bank, however, may still have some scope to try to counter a recession triggered largely by efforts to contain sovereign debt burdens in the euro zone. The Organisation for Economic Co-operation and Development will publish a review of major economies on the same day. Three Italian government bond auctions this week will test investors' appetite after the talk of Fed stimulus withdrawal. Italian and Spanish bonds were caught in the sell-off in risk assets last week but yields on both eased back on Monday as bond markets continued to focus on whether the ECB will cut interest rates again next month. Policymaker Joerg Asmussen said it would remain accommodative "as long as needed" though he sounded cautious about charging banks to put money on deposit at the ECB, something that could help hold down national borrowing costs. One should be very cautious regarding the discussion if the ECB could introduce negative deposit rates... This can have advantages, but it can also have disadvantages," Asmussen said in a speech in Berlin. Additional reporting by Francesco Canepa; Editing by Ruth Pitchford