Bloomberg: Speculation that the war against inflation and China’s measures to control a Covid outbreak will torpedo economic growth sent the dollar and bond yields surging and pushed global stocks closer to a bear market.

The greenback jumped to a two-year high, rising on Monday against all of its major peers. Futures on the S&P 500 and Nasdaq 100 each tumbled by at least 1.7%. The MSCI index of world stocks extended its retreat from a November peak to 16%. Oil declined more than 2.5% as concern over slowing demand in Asia outweighed a Group-of-Seven pledge to ban Russian oil. Longer-dated Treasuries fell, with the 10-year rate adding 3 basis points.

A wave of risk aversion is sweeping through global markets after Friday’s U.S. jobs data left little room for a change of course in the Fed’s rate-increase and quantitative-tightening plans. Sentiment took a further knock over the weekend as Chinese Premier Li Keqiang warned the nation’s employment situation had turned “grave” because of Covid restrictions.

The short-term outlook for stocks “is still messy and there may be more downside as markets worry about a significant economic slowdown or ‘hard landing’ and aggressive interest-rate hikes,” Diana Mousina, senior economist at AMP Investments, wrote in a note.

U.S. futures declined after five successive weeks of declines for spot equities. In New York premarket trading, Rivian Automotive Inc. fell 16% after a report that Ford Motor Co. is selling shares in the electric-pickup maker at a discount. Major technology and Internet stocks extended their losses, with Apple Inc. and Amazon.com Inc. both lower.

An Asia-Pacific equity gauge shed 1.7%. The Bloomberg Dollar Spot Index rose for a third day. Europe’s Stoxx 600 fell as much as 2.2% to a two-month low.

In China, the yuan dropped amid data showing stagnating imports and the slowest export growth in dollar terms since 2020, underlining the economic toll of Covid lockdowns. Li Keqiang warned about the employment situation as Beijing and Shanghai tightened virus curbs.

Oil fell, surrendering half of last week’s gains. Crude is being buffeted by the demand hit from China’s outbreak and supply risks linked to Russia’s war in Ukraine.

Volatility remains the watchword in global markets on growth, consumer prices and war risks. Inflation data this week from the U.S. and elsewhere could drive bond-market swings.

In the latest Russia-related developments, the G7 most-industrialized countries pledged to ban the import of Russian oil. The European Union is working on a similar plan but Hungary remains a holdout and the bloc’s talks are set to continue.

Bitcoin slid more than 4% to the lowest since July 2021. Australia’s currency fell below 70 U.S. cents for the first time since January, and India’s rupee hit a record low against the dollar, with the central bank said to be intervening to defend the currency.

Here are key events to watch this week:

Russian President Vladimir Putin speaks on Victory Day in Russia. Monday
Philippines presidential election. Monday
Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic speak. Tuesday
New York Fed President John Williams, Fed Governor Christopher Waller speak. Tuesday
Atlanta Fed President Raphael Bostic speaks. Wednesday
China PPI, CPI. Wednesday
U.S. CPI. Wednesday
San Francisco Fed President Mary Daly speaks. Thursday

Some of the main moves in markets:

Stocks

Futures on the S&P 500 fell 1.7% as of 8:11 a.m. New York time
Futures on the Nasdaq 100 fell 2.1%
Futures on the Dow Jones Industrial Average fell 1.3%
The Stoxx Europe 600 fell 1.8%
The MSCI World index fell 0.6%

Currencies

The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.0561
The British pound rose 0.3% to $1.2384
The Japanese yen fell 0.2% to 130.85 per dollar

Bonds

The yield on 10-year Treasuries advanced four basis points to 3.16%
Germany’s 10-year yield advanced three basis points to 1.17%
Britain’s 10-year yield advanced five basis points to 2.05%

Commodities

West Texas Intermediate crude fell 2.4% to $107.18 a barrel
Gold futures fell 1.2% to $1,861 an ounce