By Zhang Mengying

– Asia Pacific stocks were mostly down on Monday morning as a new wave of COVID-19 outbreak in China exacerbated overarching worries about the global economic outlook.

Japan’s Nikkei 225 jumped 0.94% by 11:02 PM ET (3:02 AM GMT).

South Korea’s KOSPI fell 0.21%.

In Australia, the ASX 200 fell 0.60%.

Hong Kong’s Hang Seng Index was down 2.87%.

China’s Shanghai Composite was down 1.55% while the Shenzhen Component was down 1.73%. In China, Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant on Sunday and warned of “very high” risks, stoking fears of more lockdowns. Beijing has also vowed to shore up the economy.

Fears of high inflation and slowing economic growth continue to weigh on markets. U.S. unemployment rate remained 3.6% which eased some recession fears, raising expectations of more monetary tightening.

Treasuries edged lower, taking the U.S. 10-year yield toward 3.1%.

Investors now await U.S. Consumer Price Index (CPI), due this Wednesday, which is expected to get closer to 9%, a fresh four-decade high.

The consumer-price index data will be “the core driver of risk this week” and a 9% print is possible, which “should keep US bond yields headed higher,” Pepperstone Group head of research Chris Weston said in a note.

President Joe Biden’s talks on possible action on U.S. tariffs on Chinese imports are ongoing. Biden and his Chinese counterpart Xi Jinping are expected to speak again in the coming weeks.

On the data front, China’s exports and imports data are due on Tuesday.