Asian shares are set to fall after hawkish signaling from the Federal Reserve intensified a rout in Treasuries and the S&P 500 saw a volatile session.

Japanese and Australian futures point to sizable declines at the opening Tuesday, as the sigh of relief for stocks after a weekend deal to avoid a US government shutdown was overtaken by messaging that the Fed needs to keep borrowing costs high to rein in inflation. Yields on five- to 30-year Treasuries all rose about 10 basis points Monday, while those on the benchmark 10-year note climbed to the highest since 2007.

Energy and financial stocks sold off Monday, erasing gains for the year in the S&P/Toronto Stock Exchange Composite Index. The tech-heavy Nasdaq 100 defied the negative sentiment, ending the day 0.8% higher, buoyed by firms including Microsoft Corp., Apple Inc. and Nvidia Corp.

Read more: Canadian Stocks Erase Year’s Gains, Fall Further Behind US Peers

Fed Vice Chair for Supervision Michael Barr said the biggest question before central bankers was how long to leave rates elevated, while known FOMC hawk Michelle Bowman reiterated her call for multiple hikes. On Friday, New York Fed boss John Williams had suggested rates should stay high for some time.

The Reserve Bank of Australia is forecast to leave its policy rate unchanged for a fourth meeting on Tuesday, even as Australian home prices stayed strong in September. New Zealand’s central bank on Wednesday is also expected to keep rates unchanged 10 days from a general election. China is in the midst of a week-long holiday.

Read more: Fed’s Barr Says Biggest Question Is How Long Rates Stay High

The S&P 500’s intraday drop was seen as a bearish signal “given the fact that Congress came in and averted a risk that was on everyone’s radar as far as the government shutdown,” said Mike Harris, president of Quest Partners.

“The fact that we’re not seeing a more significant rally is meaningful, and once again this move up in interest rates in large part is the market finally waking up to this reality of higher rates for longer,” he said.

The selloff in global bonds gathered momentum as the US shutdown reprieve prompted traders to raise bets on a November rate hike from the Fed. They now see a roughly one-in-three chance of a November move, up from the 25% likelihood priced on Friday.

The dollar rose versus its Group-of-10 peers Monday, after enjoying its best quarter in a year. Against the yen, it touched a year-to-date high, after the Bank of Japan said it would conduct an additional buying operation. Gold prices slipped to seven-month lows, extending last week’s 4% slide, under pressure from surging bond yields.

Oil retreated, with West Texas Intermediate dropping below $90 a barrel. A Citigroup Inc. analyst said waning demand from China is poised to to cap the gains from OPEC+ supply cuts.

Read more: Citi’s Morse Sees Oil Demand Drag in China, US Limiting Rally

Key events this week:

• China has week-long holiday
• New York Fed President John Williams moderates discussion on climate risk, Monday
• Cleveland Fed President Loretta Mester speaks on economic outlook, Monday
• US ISM manufacturing index, Monday
• Australia rate decision, Tuesday
• Atlanta Fed President Raphael Bostic speaks on economic outlook and inflation, Tuesday
• August US JOLTS report, Tuesday
• Eurozone services and composite PMIs, Wednesday
• ECB President Christine Lagarde gives welcome address at conference, Wednesday
• US ISM services index, Wednesday
• France industrial production, Thursday
• BOE Deputy Governor Ben Broadbent, Riksbank First Deputy Governor Anna Breman participate at panel discussion, Thursday
• San Francisco Fed President Mary Daly speaks at the Economic Club of New York, Thursday
• Germany factory orders, Friday
• September US nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

• Hang Seng futures fell 0.7% as of 6:44 a.m. Tokyo time
• S&P/ASX 200 futures fell 1.3%
• The S&P 500 was little changed as of 4 p.m. New York time
• The Nasdaq 100 rose 0.8%
• The Dow Jones Industrial Average fell 0.2%
• The MSCI World index fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.7%
• The euro was little changed at $1.0479
• The British pound fell 0.9% to $1.2093
• The Japanese yen was little changed at 149.84 per dollar
• The offshore yuan was little changed at 7.3220 per dollar

Cryptocurrencies

• Bitcoin fell 0.9% to $27,592.53
• Ether fell 0.7% to $1,654.25

Bonds

• The yield on 10-year Treasuries advanced 11 basis points to 4.68%
• Australia’s 10-year yield advanced 10 basis points to 4.59%
• Germany’s 10-year yield advanced eight basis points to 2.92%
• Britain’s 10-year yield advanced 13 basis points to 4.56%

Commodities

• West Texas Intermediate crude fell 2.2% to $88.76 a barrel
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.