Brent oil prices extended their bull run to reach ground last visited in late 2018, with gains across the energy complex stoking inflation concerns.

"Higher energy prices, shortages will inevitably make their way through global value chains in the form of rising prices and potentially shortages of industrial and consumer goods," said OANDA analyst Jeffrey Halley.

"All of this makes the constant blathering from central bankers around the world about inflation being 'transitory' ring more and more hollow."

Inflation jitters kept investors cautious, with the Euro STOXX 50 0.2 per cent lower.

Nasdaq futures and S&P 500 futures were down around 0.4 per cent and 0.3 per cent, respectively.

The MSCI world equity index, which tracks shares in 50 countries, was 0.1 per cent higher.

Sentiment in China was partly helped by some cities' planned supportive measures for the beleaguered property market.

China's blue-chip CSI300 index rose 0.1 per cent, while MSCI's broadest index of Asia-Pacific shares outside Japan added 0.6 per cent.

The drop in the yen provided a welcome boost to Japan's Nikkei which reversed early losses to rise 1.6 per cent.

The US earnings season kicks off this week and is likely to bring tales of supply disruptions and rising costs. JPMorgan reports on Wednesday, followed by BofA, Morgan Stanley and Citigroup on Thursday, and Goldman on Friday.

The focus will also be on US inflation and retail sales data, and minutes of the Federal Reserve's last meeting that should confirm that a November tapering was discussed.

"The week ahead will centre around the US CPI release on Wednesday, but it might be a touch backward-looking given that energy has spiked more recently and that used car prices are again on the march after a late summer fall that will likely be captured in this week's release," Deutsche Bank's Jim Reid wrote in a note to clients.

While headline US payrolls number on Friday disappointed, it was partly due to reopening problems in state and local education while private sector employment was firmer.

Indeed, with a lack of labour driving the jobless rate down to 4.8 per cent, investors were more concerned about the risk of wage inflation and pushed Treasury yields sharply higher.

Yields on 10-year notes were trading up at 1.62 per cent, having jumped 15 basis points last week in the biggest such rise since March.

Germany's 10-year Bund yield rose to its highest since May, up more than 2 basis points to -0.117 per cent.

British gilt yields rose sharply, with the 10-year yield marking its highest since May 2019 after weekend comments from Bank of England policymaker Michael Saunders that households should get ready for "significantly earlier" rate rises as inflation pressure mounts.

Money markets moved to fully price a 10 basis-point rate hike from the European Central Bank by the end of 2022.

Analysts at BofA warned the global inflationary pulse would be aggravated by energy costs with oil potentially topping $100 a barrel amid limited supply and strong re-opening demand.

The winners in such a scenario would be real assets, real estate, commodities, volatility, cash, and emerging markets, while bonds, credit and stocks would be affected negatively.

BofA recommended commodities as a hedge and noted resources accounted for 20-25 per cent of the main equity indexes in Britain, Australia and Canada; 20 per cent in emerging markets; 10 per cent in the euro zone, and only 5 per cent in the United States, China and Japan.

The dollar was underpinned as US yields outpaced those in Germany and Japan, lifting it to the highest since late 2018 on the yen at 112.90.

The euro hovered at $1.1571, having reached the lowest since July last year at $1.1527 last week. The dollar index held at 94.123, just off the recent top of 94.504.

US currency and fixed income markets are closed on Monday for a holiday.

The firmer dollar and higher yields have weighed on gold, which offers no fixed return, and left it sidelined at $1,756 an ounce.

US crude oil prices kept climbing after gaining 4 per cent last week to the highest in almost seven years.

Brent jumped 1.7 per cent to $83.75, while US crude rose 2.2 per cent to $81.06 per barrel.

Australian Associated Press