The week started with USD strength following by more hawkish comments from Fed’s Yellen, which reiterated that there is a strong possibility to raise rates in the coming months. This week will feature many key data, including ECB interest rates on Thursday and US NFP on Friday. Because of Yellen’s emphasis on the labor market, the U.S. nonfarm payrolls report on Friday will attract more than the usual attention. As it is Memorial Day in the US, volatility is expected to be subdued 

Currencies: US extended gains overnight, as Asia reacted to the hawkish remarks from FED chairwoman. EUR/USD started the new trading week around 1.1115 and fell to a low of 1.1097 (2.5 month lows). GBPUSD opened at 1.4605 and consolidated in a 1.4600-30 range. USDJPY had the largest move overnight, as it rallied from 110.35 at the open to 111.02 so far. The European Central Bank will meet on Thursday, and is expected to keep interest rates on hold and reaffirm its focus on implementing its stimulus package announced in March.

Stocks:  Asian shares made gains in morning trade on Monday with sentiment cautious following remarks last week that signal at least one Federal Reserve rate hike this summer and in thin dealing with markets in the U.S. and U.K. shut for holidays. Last week, U.S. stocks ticked up on a volatile final session before the Memorial Day holiday, as Janet Yellen rattled Wall Street by offering strong indications that the Federal Reserve could raise interest rates in the coming months.

Oil and GOLD: Oil prices fell on Monday as a strong USD weighed on markets and Canadian oil production was expected to increase this week. A strong USD makes it more expensive for countries using other currencies to import USD-traded fuel, a potential knock on demand. Attention will also be on a meeting by the Organization of the Petroleum Exporting Countries (OPEC) in Vienna this week, although most analysts do not expect any decisions that would lead to changes in production. GOLD Gold is on track for its biggest monthly decline since June 2013 after Federal Reserve Chair Janet Yellen said the improving U.S. economy meant another interest-rate hike would probably be in order “in the coming months,” pushing the USD to the highest since March.