Asian equity markets closed down following overnight losses on Wall Street and a positive start to the week for global stocks as traders assessed developments surrounding the Omicron coronavirus variant.
"The major event of the week is today's US inflation data," noted Ipek Ozkardeskaya, senior analyst at SwissQuote.
"It is what will influence the Fed expectations for the next couple of months."
Markets are looking to see when the Federal Reserve will hike US interest rates after a number of other central banks already tightened borrowing costs to tackle surging inflation.
"It goes without saying that today's inflation report in the US is the main event," said Matt Simpson, senior market analyst at City Index.
"It hit a 30-year high in October and expectations are for those numbers to be inflated further."
In Europe on Friday, official data revealed that Britain's economic growth recovery slowed in October even before the appearance of the Omicron variant that has pushed the UK government to restore restrictions.
UK gross domestic product increased 0.1 percent in October compared with output of 0.6 percent the previous month.
Analysts said the growth slowdown made it less likely that the Bank of England would next week raise its main interest rate.
"Although a rate rise can't be completely ruled out...most bets are off that the bank will push them up so soon, given this latest downbeat reading and the fact that the Omicron variant is still an unknown quantity," said Susannah Streeter, senior analyst at Hargreaves Lansdown.
"A rate rise in February is more likely to be on the table, as the inflation kettle is set to be whistling loudly by then. That is unless restrictions are ramped up dramatically, pushing the economy into an even tighter recovery position."
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