Global markets were routed for the second day in a row on Monday, with Asian and European indexes opening lower and bond yields rising as resurgent U.S. inflation raised the possibility central banks would tighten policy more aggressively than had been expected.

Asian stocks suffered broad losses, with the MSCI Asia-Pacific index ex-Japan plunging as much as 2%, its largest daily drop since late 2016, while S&P futures extended Friday’s decline; the Nikkei dropped 2.6% while Hang Seng plunged as much as 2.7% before rebounding. The selling fed through into Europe, however without heavy continuing momentum.

Meanwhile, U.S. equity futures are above initial lows printed straight from Globex electronic re-open, helped in part by reports that China’s regulator would act to “mitigate” the equity selloff, which helped Chinese indices to rally into close, and close green.

Friday’s payrolls report showed wages growing at their fastest pace in more than eight years, fuelling expectations for both inflation and interest rates would rise more than previously forecast. That sparked a global sell-off that continued on Monday. Futures markets priced in the risk of three, or even more, rate rises by the Federal Reserve this year.

“This added fuel to a bond market sell-off, pushing US 10 year Treasury bond yields closer to the magic 3 percent level, which will only increase borrowing costs for corporates following years of cheap financing, thus ushering equities further from recent highs,” said Mike van Dulken, head of research at Accendo Markets.

As a result, all eyes remain on the 10Y US Treasury for indication if last week’s rout would continue, and while treasuries remain under pressure, with the yield briefly touching 2.885%, the selloff appears to have since moderated.

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