After a painful collapse for equities a week ago, fuelled by a big miss on US jobs creation, equities have bounced back and ended Friday on a healthy note.

The gains were helped by a report showing fewer people than expected claimed US unemployment benefits, soothing fears that the world's top economy was contracting.

The recovery extended into the new week, while the dollar was mixed against main rivals.

"The stabilisation of sentiment is continuing, following the sell off a week ago, as concerns about an American recession ease off a little," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The latest inflation data in the US will be in sharp focus this week."

The data could spark renewed volatility.

"It feels that any number that falls outside of expectation could be the catalyst for an outsized move, in either direction," said Trade Nation analyst David Morrison.

"It is worth considering that US Treasuries remain in demand, suggesting that investors are wary of taking on too much additional exposure to equities," he added.

Traders are seeking clues over the number of likely US interest-rate cuts this year as inflation slows.

Expectations are that the bank will lower borrowing costs 25 basis points next month, and at least once more before January, thanks to a string of data suggesting price rises have been brought under control.

Elsewhere, the yen weakened against the dollar following last week's gyrations.

Oil prices grew solidly on supply-risks on the drawn-out conflict in the Middle East and owing to an escalation of tensions in major crude producer Russia.

* This story was edited by Ahram Online.