Major share markets were muted on Monday as investors count down to another US inflation reading that could well set the seal on an early rate hike from the Federal Reserve, lifting bond yields and punishing tech stocks.

The explosion in coronavirus cases globally also threatens to crimp consumer spending and growth just as the Fed is considering turning off the liquidity spigots, tough timing for markets addicted to endless cheap money.

That made for cautious trading with S&P 500 futures off 0.1% and Nasdaq futures up 0.1%. EUROSTOXX 50 futures and FTSE futures both edged up 0.2%.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2%, while South Korea lost 1.0%.

Japan’s Nikkei index edged lower by 9.31 points to 28,478.56 in early trade, while Hang Seng index was up by 193.72 points, or 0.82 per cent, at 23,687.10.

Chinese blue chips were little changed as recent policy easing was balanced by lingering concerns over the property sector.

Analysts fear the US consumer price report on Wednesday will show core inflation climbing to its highest in decades at 5.4% and usher in a rate rise as soon as March.

While the December payrolls number did miss forecasts, the drop in the jobless rate to just 3.9% and strength in wages suggested the economy was running short of workers.

A raft of Fed officials will be out to offer their latest thinking this week, including Chair Jerome Powell and Governor Lael Brainard who face confirmation hearings.

Tech stocks tumble

Technology and growth stocks tumbled as investors switchedto banks and energy firms, while bonds took a beating.

Yields on 10-year US Treasury notes were near highs last seen in early 2020 at 1.765%, having shot up 25 basis points last week in their biggest move since late 2019. The next chart target is the 1.95/1.97% area.

The Fed's hawkish shift has tended to benefit the US dollar, though it ran into profit taking on Friday after thepayrolls report failed to meet the market's lofty expectations.

The dollar index was flat at 95.764, after falling0.5% on Friday, but has support at 95.568.

The euro bounced to $1.1354, leaving it near the topof the recent $1.1184/1.1382 trading range. The Japanese yen gota break from its recent bear run to stand at 115.64, asthe dollar faded from last week's 116.34 peak.

In commodity markets, gold was a shade firmer at $1,795 anounce but short of its January top at $1,831.Oil prices held steady, having climbed 5% last week helped inpart by supply disruptions from the unrest in Kazakhstan andoutages in Libya.

Brent added 7 cents to $81.82 a barrel, while US crude stood unchanged at $78.90.

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