Global stock markets tumbled on Monday as investors fled to bonds amid the economic shock of the coronavirus, while oil prices plunged about 25% after Saudi Arabia cut prices and outlined plans for a big increase in crude production in April.

Brent crude futures were down $11.14 to $34.13 a barrel.

The pan-European STOXX 600 fell 7% and London’s commodity-heavy FTSE 100 was down 6%. Trading on US stock exchanges was halted immediately after opening as the S&P 500 fell 7%.

The 10-year Treasury bond yield fell below 0.5% and the 30-year bond yield dropped under 0.9% — meaning the whole US yield curve is now below 1% for the first time ever.

Saudi Arabia, the world’s biggest oil exporter, is attempting to punish Russia, the world’s second-largest producer, for not supporting production cuts proposed last week by the Organization of the Petroleum Exporting Countries (OPEC).

Eurasia Group said in a note: “Saudi Arabia and Russia are entering into an oil price war that is likely to be limited and tactical.

“The most likely outcome of this crisis is entrenchment into a painful process that lasts several weeks or months, until prices are low enough to change fundamental views in Moscow and Riyadh back (to) some form of compromise on resumed OPEC+ production restraint.”

Investors will now focus on the European Central Bank’s policy meeting on Thursday, following interest rate cuts by central banks in the United States, Canada and Australia last week in an attempt to soften the blow of the outbreak.

Satya Pradhuman, director of research at Cirrus Research, wrote in a note to clients: “It is too early to expect a market bottom …

“Credit spreads are likely to widen further from here.

“In addition, earnings risks abound and estimates are still likely to fade further.”