European shares fell to two-month lows on Monday amid U.S.-China trade frictions and worries that drove the bloc’s investors shifting towards government bonds and other traditional market products.

Following growing economic tensions between the USA and China and an overnight plunge on Wall Street, the Nikkei 225 Stock Average hit its lowest figure since January 2019 during the morning trading session.

The pan-European STOXX 600 index fell 1% adding to a 2.5% fall on Friday, its worst day so far in 2019, after U.S. President Donald Trump upped the ante on China by slapping 10% tariffs on another €267 billion in imports.

Stocks in Asia were down across the board for a second day on Tuesday, keeping up with the sell-off that began on Monday when the Chinese government let the yuan fall below its 7-to-1 ratio with the US dollar for the first time in a decade. The yuan’s daily reference rate Tuesday of 6.9683 to the US dollar is the currency’s lowest since May 2008, during the global financial crisis.

As a consequence, US markets suffered some of their biggest drops of the year, leading Trump administration to later label China a “currency manipulator.” China’s official Communist Party newspaper said on Tuesday that the United States was “deliberately destroying international order,” rapidly escalating trade dispute.

Hong Kong’s Hang Seng Index (HSI), Japan’s Nikkei, mainland China’s Shanghai Composite Index (SHCOMP) and Taiwan’s Taiex fell more than 2% in early trading Tuesday after the People’s Bank of China allowed the yuan to drop to its lowest level in 11 years. The central bank’s cut to the yuan’s reference rate — a “band” it sets every day to curb how far up or down the yuan’s value can move — was also the deepest in more than a year.

Yi Gang, Governor of the Chinese central bank, said in a statement Monday night that China would “not engage in competitive devaluation, and not use the exchange rate for competitive purposes and not use the exchange rate as a tool to deal with external disturbances such as trade disputes.”

Furthermore, HSBC (HBCYF) shares that are listed in Hong Kong continued dropping, down 1.5% on Tuesday, after falling 1.9% on Monday after the announcement that John Flint will step down as chief executive hit the wires.