In a quiet start to the week, European, and Asian stocks fell with S&P futures fractionally in the red, as Chinese markets tumbled the most since June and crude oil surged, even as the Nikkei erased all losses for 2016 on continued weakness in the Yen.

The big story continues to be crude oil which surged 5% to the highest in 17 months, with WTI and Brent trading near $54 and $57 respectively, following Saturday’s agreement by NOPEC (mostly Russia and Oman) nations to cut as much as 600kbpd in production as described in Saudi “Shock And Awe” Sparks Buying Panic In Crude – WTI At 17-Month Highs.

Oil jumped after after Saudi Arabia, whose output just hit a new all time high when it told OPEC it pumped 10.72 million barrels per day last month, up from 10.625 million bpd in October, signaled it will cut output by more than previously agreed amid a weekend deal to tackle oversupply with competitors such as Russia. Longer-dated securities led declines as government bonds around the world tumbled, while climbing energy shares bucked a drop in Europe’s wider benchmark stock gauge.

The jump in oil continues to push up the outlook for global inflation, sending 10-year Treasury yields above 2.5% for the first time since October 2014, as longer-dated government bonds around the world tumbled. The prospect of increased price pressures is filtering through into the market’s outlook for central-bank policy, with traders seeing 100 percent odds of a rate hike at this week’s Federal Reserve meeting, and a two-in-three chance of additional tightening by June, according to Bloomberg calculations based on fed fund futures.

“The spike in oil is behind the further cheapening in global bonds,” said Craig Collins, managing director of rates trading at Bank of Montreal in London. “It’s a foregone conclusion that we’re going to have a 25 basis-point rate hike.”

China stocks suffered their biggest fall in six months as blue chips were knocked by fresh regulatory curbs to rein in insurers’ aggressive stock investments and rising bond yields prompted profit-taking in equities.China’s insurance regulator, which recently warned it would curb “barbaric” acquisitions by insurers, said late on Friday it had suspended the insurance arm of China’s Evergrande Group from conducting stock market investment.

The Shanghai Composite Index sank the most since June as a gauge of smaller companies in Shenzhen plunged more than 5%, and the ChiNext index slumped 5.5% amid concerns about the outlook for the property market, while intermarket liquidity tightened, with various funding indicators once again showing funding stress and rising tightness as regulators continued their crack down on insurers’s stock investments and Donald Trump raises concern about a possible trade war, said Ken Peng, Asia investment strategist at Citigroup Global Markets Asia. Hong Kong’s Hang Seng Index slipped 1.5%.

“The decline in stocks was the result of amplified impact on market sentiment after the cumulative events of higher government bond yields, a weaker yuan against the dollar and regulatory curbs on insurance funds,” said Chen Li, a strategist at Credit Suisse in Hong Kong.

The Yuan tumbled above 6.90 for the dollar, and will likely continue to face pressure, as Trump tying Taiwan policy to trade deals with China raises the risk of trade conflict. According to Bloomberg. domestic liquidity would stay tight to support yuan, which is negative for stock market. The recent crackdown on insurers’ acquisitions in listed companies has raised concern that insurance fund inflows to equities may slow until authorities clarify rules. As a result, investors are taking profits as good news is largely priced in and regular position adjustments start before year- end. However, analysts note that as interest rates are more likely to rise in China, and property prices decline, investors will still favor stocks in 2017.

Japanese shares rose, with the Nikkei 225 Stock Average recouping losses for this year as the yen slid to a 10-month low against the dollar before the Federal Reserve sets interest rates this week. The equity gauge advanced for a fifth day, its longest rally in two weeks. The Topix index fluctuated between a gain of 1.2 percent and a decline of 0.3 Japanese stocks have staged a dramatic rebound in the second half, riding on a global recovery in risk appetite, with investors betting that U.S. President-elect Donald Trump will boost economic stimulus.

The Nikkei and Topix have climbed more than 10% over the past two months, entering a bull market in November after rising by more than 20 percent from their respective 2016 lows set in June. “Markets are moving ahead quite a bit based on expectations, which may be the case until January,” Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui told Bloomberg “Policy expectations for the Trump administration are basically a tailwind for cyclical shares, and export-reliant businesses will continue see positive momentum.”

In Europe, the Stoxx Europe 600 Index fell 0.4 percent in early trading, following its biggest weekly rally in almost two years. Still, commodity producers and miners gained, with the Stoxx 600 Oil & Gas Index up 2.1 percent. Amundi SA rose 6.7 percent after the firm agreed to buy Pioneer Global Asset Management from Italy’s UniCredit SpA. Banca Monte dei Paschi di Siena SpA shares advanced as much as 10.3 percent after the lender’s board met on Sunday and agreed to stick with its original deadline for its capital plan.

“Weakness out of China and Hong Kong has somewhat dampened the prevailing bullish sentiment,” Markus Huber, a trader at City of London Markets, wrote in emailed comments.

Banks and technology shares drove the S&P 500 to a 3.1 percent climb last week, with the U.S. benchmark reaching successive all-time highs as the Dow Jones Industrial Average also rose to records. S&P futures fell 0.2 percent on Monday.

Ten-year Treasury yields rose as much as six basis points to 2.53 percent. The U.S. Treasury auctions 10-year notes later Monday, and 30-year bonds Tuesday. Hedge funds and other large speculators raised bearish bets on 10-year Treasuries to the highest in almost two years last week, more than doubling them to a net 228,604 contracts, according to the latest Commodity Futures Trading Commission data. Germany’s yield curve, as measured by the spread between two- and 30-year bonds reached the steepest since 2014, based on closing prices, while a similar gauge for Japan widened for a fifth day U.K. 10-year yields climbed three basis points to 1.48 percent, while those on similar-maturity bunds also added three basis points, to 0.39%.