Despite a thin economic calendar yesterday and after a long time, volatility was the theme of the day. Price action was most evident in GBP, EUR, OIL and GOLD due to various reasons for each which we will describe below. For today, the key data out of the US is the ISM non-manufacturing index. In the EZ retail sales will be released, and from the UK we will have the UK PMI services report. As a reminder, we have the US NFP report this Friday, which could further spark volatility. 

Currencies: Where to start? GBPUSD which made also the most eye catching headlines. GBPUSD dropped to a new 31-year low, even lower than the Brexit day, and reached a low of 1.2720 (previous 30-year low was 1.2790). Earlier in the week, Theresa May indicated that she would trigger article 50 and start the negotiation process for leaving the EU. This news surprised some investors who had secretly hoped that the process would be delayed or even avoided. The USD in general got an uplift from Fed Official after he said that there was a strong case for interest rates to rise soon. Despite USD strength, the EUR bounced to 1.1239 highs from 1.1138 before dropping again after rumors circulated that the ECB would stop with its Asset purchase program. The USD was little changed at 102.880 JPY after rising to a three-week high of 102.96 overnight, when it posted its sixth straight day of gains versus its Japanese peer.

Stocks: US stocks closed lower following the report that the ECB might end its Quantitative easing program sooner than expected. The Dow fell 0.5%, same as S&P500, while the Nasdaq dropped to 0.2%. Today, shares in Asia are mixed as Australia is trading -0.5% lower while the Nikkei posted new session highs. Earlier, the German DAX opened higher.

Oil and Gold: I usually start with Oil, but what happened with Gold yesterday was long not seen. The yellow metal finally broke through its range and had a massive selloff of $46! It is one of the biggest daily moves since October 2013, which saw the price drop from $1312 to as low as $1266. Oil prices have also risen in the last session, posting new monthly highs, however significant resistance can be seen at these levels ($49.35)