Nasdaq futures and S&P 500 futures were both down around 0.1 percent, but well above early lows. EUROSTOXX 50 futures dipped 0.1 percent and FTSE futures held steady.

Oil prices extended their bull run, with gains across the energy complex stoking inflation concerns.

"Bond yields continue to push higher, inflation expectations are rising and monetary tightening in various guises is becoming more prevalent," said ANZ analysts in a note.

"The global chips shortage will extend well into next year, adding further uncertainty to uneven recoveries," they said. "Add in energy shortages, and the economic landscape is materially more sober than the optimism that accompanied the early stages of global recovery."

Yet a 1 percent rise in the Chinese blue chip index helped stabilise the mood and MSCI's broadest index of Asia-Pacific shares outside Japan added 0.7 percent.

The drop in the yen provided a welcome boost to Japan's Nikkei which reversed early losses to rise 1.7 percent, though Australia was still off 0.4 percent.

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 Bank of America (BofA), Morgan Stanley and Citigroup on Thursday, and Goldman Sachs on Friday.

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

While the headline US payrolls number on Friday disappointed, it was a 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 percent, 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 percent, having jumped 15 basis points last week in the biggest such rise since March.

Bonds also sold off in Asia and Europe, with short-term yields in Britain hitting their highest since February 2020.

Analysts at BofA warned the global inflationary pulse would be aggravated by energy costs with oil potentially topping US$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 to 25 percent of the main equity indices in the UK, Australia and Canada; 20 percent in emerging markets; 10 percent in the Eurozone, and only 5 percent in the US, 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 112.41.

The euro hovered at $1.1572, having reached the lowest since July last year at $1.1527 last week. The dollar index held at 94.158, just off the recent top of 94.504.

The firmer dollar and higher yields has weighed on gold, which offers no fixed return, and left it sidelined at $1,760 an ounce.

Oil prices were up again after gaining 4 percent last week to the highest in almost seven years.

Brent climbed 91 cents to $83.30, while US crude rose $1.13 to $80.48 per barrel.