After US data showed a sticky inflation still plaguing the economy, investors are now anxiously awaiting data on consumer prices from Spain, France, and Sweden, as they mull over the latest data from China which pointed to persistent deflationary pressures.

US consumer price data released on Thursday has triggered fears in investors that the US Federal Reserve may decide to continue its policy of monetary tightening for a little longer. Prior to the report the market had priced in about a 28% chance there would be another rate hike in December, however after the report that figure increased to 40%.

Fed officials have indicated in recent comments that the rate hike cycle might be able to be ended due to rising bond yields. However the new data has once again triggered fears of a new rate hike cycle.

During Asian hours, it produced a risk-off environment, as the broadest index of Asia-Pacific shares outside Japan from MSCI slid 1%, on course to break its three-day streak of gains.

After ending Thursday trading with the largest single-day percentage increase since March, the dollar held onto its overnight gains against a basket of currencies. As a result, the yen is back under pressure, sitting at around 150 per dollar.

Futures point to a dour mood in European stocks, which appear set to open down.

As investors have begun to grow concerned over the signs of deflation in China, Friday’s report showed an unchanged consumer price index from the previous year, which was below the forecast from a Reuter’s poll of a 0.2% increase.

Still the rate of decline in exports from Asia’s largest economy had fallen for a second month in September, which investors interpret as a sign that exports are piking up and the recently faltering Chinese economy may be stabilizing.

On Friday, earnings season will begin with the results from JPMorgan poised to kick things off and set the mood.