LONDON (Reuters) -Global stocks fell on Monday, while the dollar hit 26-month peaks following a bumper U.S. jobs report that prompted investors to question if interest rates will fall at all this year, just as earnings season is about to get underway.

A surge in energy prices has added to concern about steadily rising inflation, as crude oil topped $80 a barrel on the back of signs that Russian exports are falling as Washington has stepped up sanctions on the country.

European natural gas prices have risen by 4% in the last month alone following a cold snap and after Ukraine's decision to halt supplies of Russian gas deliveries via pipeline.

Data also showed China's export growth picked up steam in December, while imports recovered, as the world's No. 2 economy braces for mounting trade risks with the incoming U.S. administration.

In Europe, equities fell for a second day, leaving the STOXX 600 down 0.7% and Germany's DAX down 0.6%. The FTSE 100 was only down 0.4%, supported by weakness in the pound, which was once again in focus as UK borrowing costs continued to rise.

Markets show traders have already scaled back expectations for Federal Reserve rate cuts to just 25 basis points for all of 2025, from closer to 45 bps before Friday's jobs data.

"After a very strong jobs report, we think the cutting cycle is over," declared Aditya Bhave, deputy chief U.S. economist at BofA. "Inflation is stuck above target, with upside risks."

"The conversation should move to hikes, which could be in play if y/y core PCE exceeds 3% and inflation expectations de-anchor," he added, referring to the Fed's favoured personal consumption expenditure measure of prices.

Yields on 10-year Treasuries traded at to 14-month peaks of 4.79%.

Wednesday's consumer price index (CPI) report could prove even more market-moving than usual, given how close investors are to ruling out any rate cuts at all this year.

"As the weather warms up a bit, whether the deep freeze in bond markets continues may be determined by how US CPI on Wednesday materialises after Friday's blockbuster payrolls report," Deutsche Bank strategist Jim Reid said.

Higher bond yields raise the discounting bar for corporate earnings and make debt relatively more attractive compared to equities, cash, property and commodities.

But they also raise borrowing costs for businesses and consumers. Part of the increase in yields over the past few weeks has been driven by an expectation that President-elect Donald Trump's proposed tariffs will raise import prices.

This could test the optimism around corporate earnings as the season kicks off on Wednesday with the major banks including Citigroup, Goldman Sachs and JPMorgan.

MORE LOSSES AHEAD

S&P 500 futures fell 0.6%, and Nasdaq futures dropped 0.95%, suggesting more losses ahead on Wall Street on top of Friday's slide.

In Asia, a holiday in Japan made for thin trading on Monday. Chinese blue chips fell 0.3%, as data showed exports rose a surprisingly steep 10.7% and imports added 1%, adding ammunition to those calling for harsh tariffs on Chinese goods.

The 45-bp rise in Treasury yields in the last two months has pushed the dollar to its highest since November 2022 against a basket of currencies.

Sterling has been particularly hard hit, down 4.4% in that time. On Monday, the pound was down 0.4% at $1.215, its weakest since early November 2023.

The global selloff in bonds has battered the UK gilt market, sending long-term yields to their highest since 1998, as concerns have mounted over the government having to borrow more to meet its budget commitments.

British finance minister Rachel Reeves on Saturday said she would act to ensure the government's fiscal rules were met.

The euro was down 0.3% at $1.0216, having touched its lowest since November 2022 earlier in the day, at $1.0207.

The dollar fell 0.1% against the yen to 157.535, but remained near six-month highs.

Oil prices rose another 2%, after a drop in Russia's seaborne exports to their lowest since August 2023 fuelled concern about supply, even before the latest round of U.S. sanctions. Brent crude futures were up 2.3% at 81.56 a barrel.

(Additional reporting by Wayne Cole in Sydney and Rae Wee in Singapore; Editing by Kate Mayberry, Jacqueline Wong and Angus MacSwan)