Stocks set to start the week under pressure from inflation data, risk aversion grips markets

The stock market looks set to start the week under pressure due to investors looking for U.S. inflation data amid the Federal Reserve hawkish tilt and the impact of omicron as risk aversion grips financial markets.

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Asian futures pointed to benchmarks opening lower. After a mixed U.S. jobs report fanned volatility, U.S. stocks extended a weekly slide Friday. Technology companies underperformed, led by Tesla Inc. Facebook parent Meta Platforms Inc. and Apple Inc. Haven assets like Treasuries and gold climbed.

The dollar was mixed in early Asian trading, while the yen held most of its gains. The risk-off wave swept up cryptocurrencies, withBitcoin plunging.

After the nation's companies listed in the U.S. fell Friday amid growing scrutiny of Chinese firms traded in America, Chinese markets will be in focus.

Consumer prices in November are expected to show the largest annual advance in decades, keeping pressure on the Fed to deliver swifter policy tightening. Fed Chair Jerome Powell said there was a tapering of asset purchases amid elevated inflation. U.S. jobs had the smallest gain this year, and that assessment is unlikely to change.

This week s November CPI data could trigger markets to price in a more aggressive tightening cycle, said Kim Mundy, a strategist at Commonwealth Bank of Australia. Market participants will still be interested in the severity, infectiousness and resistance of the strain due to Omicron related uncertainty. Goldman Sachs Group Inc. cut its forecast for the U.S. economy this year and next with omicron seen as a drag on growth.

Anthony Fauci, U.S. President Joe Biden's chief medical adviser, said on Sunday that there did not seem to be a great degree of severity to omicron, while cautioning that it is too early to be certain. Moderna Inc. President Stephen Hoge said there was a real risk that existing vaccines will be less effective against omicron.

For more market analysis, read our MLIV blog.

Some of the biggest moves in markets are:

The Japanese yen was at 112.84 per dollar.

The offshore yuan was 6.3748 per dollar.

The Bloomberg Dollar Spot Index was little changed on Friday. The yield on 10 year Treasuries declined by 10 basis points to 1.34%, down 10 basis points from a year ago.

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