Share markets have dipped as traders are kept on edge by weak Chinese trade data and the impasse over the US debt ceiling, which has also caused a sharp sell-off in short-dated US Treasury bills.

Crucial US inflation data due on Wednesday that could cause a change in current market pricing for US rate cuts later in the year was top of investors' minds as well.

Europe's broad STOXX 600 index dipped 0.77 per cent but was just about still in touch with mid April's 14-month high, after MSCI's broadest index of Asia-Pacific shares outside Japan had dropped 0.78 per cent.

The Asian benchmark was dragged down by declines in onshore Chinese blue chips, off 0.86 per cent and Hong Kong 2.12 per cent lower, after Chinese trade data showed an unexpected decline in imports and slower exports growth, underlining the struggles facing the world's second-biggest economy despite the lifting of COVID curbs in December.

"When it comes to the Chinese market, you have the question coming from investors now about the strength of the recovery," said Frank Benzimra, Societe Generale's Hong Kong-based head of Asian equity strategy.

"So when you have some trend data which is not as good as people expect, it raises doubts," he said.

In Europe, real estate stocks were in the spotlight, with the European subindex down more than two per cent at one point after top Swedish landlord SBB scrapped plans for a rights issue amid growing liquidity concerns that sparked S&P to cut its credit rating to junk.

SBB's shares are down around 30 per cent across the last two sessions.

US S&P 500 E-mini futures were down 0.39 per cent.

In bond markets, most of the action was at the very short end of the US curve.

The one-month Treasury bill yield at one point rose 15 bps to 5.61 per cent, and yields on the two-month T-bill climbed 13 bps to 5.26 per cent, as investors sold off bonds that will mature around the time the US could hit its debt limit.

Both steadied in late morning European trading.

On Monday, Treasury Secretary Janet Yellen said that a failure by Congress to raise the $US31.4 trillion ($A46.5 trillion) federal debt limit would cause a huge hit to the US economy and weaken the dollar as the world's reserve currency.

"Failure to raise the debt ceiling would be a major risk to the economy and markets, and even a 'close call' in 2011 resulted in significant underperformance of equities versus bonds," said Morgan Stanley in a note.

Also on investors' minds was Wednesday's US consumer inflation report after Federal Reserve Chair Jerome Powell said last week that policy decisions will be "driven by incoming data", while signalling a likely pause in the rate hiking cycle.

At the same time, Friday's robust payrolls report prompted investors to dial back expectations for the timing and size of the Fed's first rate cut.

Money markets currently expect two quarter point rate cuts by year-end, with a risk of a third.

Economists forecast a slight moderation in the core inflation number to 5.5 per cent annually for April, matching February's print, which was the lowest since the end of 2021.

The 10-year Treasury yield eased off a one-week high to 3.4843 per cent, and the German 10-year yield was steady at 2.30 per cent.

The risk off tone was also playing out in currency markets, with the euro down 0.25 per cent to $US1.09775 ($A1.6248).

The dollar index, which measures the currency against six major peers, was little changed at 101.53 after climbing overnight from near the bottom of its trading range.

Oil prices slipped, paring strong gains from the previous two sessions. Brent crude was down one per cent at $US76.24 ($A112.85) a barrel and US West Texas Intermediate (WTI) crude fell one per cent to $US72.43 ($A107.21).

Lower oil prices in the first quarter caused Saudi oil giant Aramco's net profit for the period to fall 19 per cent.

Spot gold rose 0.5 per cent to $US2,031.9 ($A3,007.5) an ounce.