Australian shares slip on Monday, after weakness in commodity prices weighed on gold and mining stocks, and as investors braced for a US inflation reading as well as domestic jobs data due this week.

The ASX 200 closed down 76 points, or 1.1 per cent, to 6,602, with all sectors finishing in red.

By 04:12pm AEST, the Australian dollar was down to 68.08 US cents.

Markets are keenly watching for data this week that could throw light on the path of monetary policy in the United States as well as Australia.

The June US consumer price index data is due on Wednesday, while the domestic jobs report is expected on Thursday.

Gold stocks led declines on the day, down 2.7 per cent, as prices of bullion were pressured by the dollar's strength.

Sector leaders Northern Star Resources and Newcrest Mining gave up 3.1 per cent and 2.5 per cent respectively.

Miners followed suit, tumbling as much as 3 per cent, after iron ore prices took a hit on renewed COVID-19 restrictions in the world's top steel producer China.

Rio Tinto, BHP Group and Fortescue Metals shed between 2.1 per cent and 3.1 per cent.

Technology stocks also slipped 2.5 per cent, with shares of buy now, pay later firm Zip and accounting software producer Xero falling as much as 5.7 per cent and 3.2 per cent, respectively.

Financials lost 0.5 per cent despite a marginal gain earlier in the day.

The Commonwealth Bank, NAB, ANZ and Westpac dropped between 0.04 per cent and 1.2 per cent.

Link Administration LNK.AX rose as much as 0.3 per cent. The share registry firm said it was unable to recommend Canadian software firm Dye & Durham's revised takeover bid of $4.57 per share.

EML Payments plunged by 24.6 per cent after news on its chief executive, Tom Cregan, resigning.

Costa Group (-8 per cent) and Domino's Pizza (-6.3 per cent) were also among the worst performers.

On the flip side, New Hope Corporation firmed 4.7 per cent and Imugege advanced 2.2 per cent.

US rate hikes loom

Wall Street ended the day flat on Friday as Treasury yields jumped after a stronger-than-expected US jobs report, which suggested the Federal Reserve may push further interest rate hikes to cool the economy and slow inflation.

Oil prices rose more than 2 per cent on Friday, but still were down on the week, after a steep sell-off days earlier on concerns about energy demand in a potential economic slowdown.

Strong data from the US Labor Department — which reported the United States added more jobs than expected in June — indicated a recession was not yet imminent amid persistent job growth, giving the Fed scope to deliver another large interest rate increase later this month.

Non-farm payrolls jumped by 372,000 jobs in June, well above economists' expectations. The unemployment rate held steady, at 3.6 per cent.

All three US stock indices ended the week largely unchanged, as investors balanced solid economic news with the prospect of more rate hikes.

The Dow Jones Industrial Average ended down 0.2 per cent, while the S&P 500 dropped 0.1 per cent, and the Nasdaq Composite added 0.1 per cent.

"There has been a lot of doom and gloom recently, so a strong labour market read may assuage some fear of a recession and shows the resilient nature of our economy with a robust labour market in the face of hot inflation," Morgan Stanley's managing director at ETRADE, Mike Loewengart, said.

Atlanta Fed president Raphael Bostic said on Friday that he backed another three quarters of a percentage point interest rate increase, underlining the Fed's determination in tackling inflation. 

Oil prices enjoyed a reprieve, but still ended the week lower after a steep sell-off earlier in the week on concerns around dwindling demand.

Brent crude was down, buying at $US106.27 a barrel, by 12:21pm AEST.

The MSCI world equity index, which tracks shares in 45 nations, was up 0.1 per cent.

ABC/Reuters