Global shares sobered by Fed warning

Share markets have continued last week's rally in more modest fashion after a top US central banker warned investors against getting carried away over one inflation number, while Chinese stocks gained on aid for the country's property sector.

A modest miss on US inflation was enough to see two-year Treasury yields dive 33 basis points for the week and the dollar lose almost four per cent - the fourth biggest weekly decline since the era of free-floating exchange rates began more than 50 years ago.

However, the resulting easing in US financial conditions was not entirely welcomed by the Federal Reserve, with governor Christopher Waller saying on Sunday it would take a string of soft reports for the bank to take its foot off the brakes.

Waller said the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could start thinking about hiking at a slower pace.

Futures are wagering heavily on a half-point rate rise to 4.25-4.5 per cent in December, and then a couple of quarter-point moves to a peak in the 4.75-5.0 per cent range.

Two-year yields edged down to 4.39 per cent, after diving as deep as 4.29 per cent on Friday.

The benchmark European STOXX index rose 0.37 per cent, and MSCI's broadest index of Asia-Pacific shares outside Japan added 0.73 per cent, after jumping 7.7 per cent last week.

US markets looked set to open lower, with S&P E-mini futures down 0.26 per cent.

Dealers were also waiting to see if Chinese stocks could extend their big rally amid reports regulators have asked financial institutions to extend more support to stressed property developers. China's real estate index jumped 3.5 per cent in response.

Blue chips rose one per cent, helped by a slew of changes to China's COVID-19 curbs, even as the country reported more cases at the weekend.

The support for China's property sector, which consumes a vast amount of metals, boosted copper towards a five-month high. Three-month copper on the London Metal Exchange rose 0.3 per cent to $US8,519 a tonne.

The news on COVID rules had stoked a short-covering bounce in the yuan, which added to broad pressure on the dollar as yields dived. The yuan was set 1.4 per cent firmer on Monday - the largest such move since 2005.

The dollar index moved down a fraction on Monday at 106.69, still well short of last week's 111.280 top.

The euro eased a touch to $US1.0308, after climbing 3.9 per cent last week, while the dollar firmed to 139.56 yen following last week's 5.4 per cent drubbing.

Sterling eased back to $US1.1755 ahead of the British Chancellor's Autumn Statement on Thursday, where he is expected to set out tax rises and spending cuts.

Oil prices pared earlier gains and fell on Monday, after hopes of a boost in China demand were offset by the firmer US dollar. Brent crude futures were down 32 cents, or 0.3 per cent, to $US95.67 a barrel after settling up 1.1 per cent on Friday.