Talking Points:

• Both the Dollar and Yen have seen extreme monetary policy-related volatility events

• A wide gap between market and Fed forecasts on rate forecasts was ripe ground for weak service sector report

• The Pound may be in for its own monetary policy driven event in the BoE's quarterly inflation report

  The FX market is clearly volatility prone. A dramatic tumble for the Dollar this past session was equal the Japanese Yen's collapse then rebound in response to the news that the BoJ was adopting a negative rate. For the Greenback, the spark was a collective influence of headlines building on an already fragile speculative backdrop. With the market already highly skeptical of the FOMC's forecast for 100 basis points of rate hikes in 2016 (projected in the December forecasts), tangible data/news turns doubt into action. For the Dollar's stumble, considerable weight was given to the indirect influence of higher oil prices and the cautionary comments of FOMC official William Dudley. However, the more comprehensive subversion would come through the ISM's service sector survey. Accounting for the largest segment of the American business sector, the vast majority of jobs and a source of upstream inflation; the troubling statistics in this figure degrade hawkish expectations. Looking ahead, the Pound may join the volatility club with a more incisive outlook for BoE rate forecasts via the quarterly rate forecast. How long will the tumult last and which trends have staying power?