China's Shanghai Composite Index Just Lost 7.7%

On Monday, China's Shanghai Composite Index plunged 7.7 percent, losing all the gains it made since late December, the largest daily drop in over six years.

China's Securities Regulatory Commission stopped three large brokerages from extending margin accounts to new clients for three months.

Once that happened, other buyers stepped back from buying and investors started selling.

China is due to release GDP data on Tuesday.

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In other news that may impact forex and commodity markets, Germany's Bundesbank said on Monday that it will have to significantly cut its inflation forecasts for 2015. "The inflation forecast for 2015 must be cut substantially," the Bundesbank wrote in its January monthly report.

The ECB has a policy meeting on Thursday, January 22.

Image credit: Joi Ito, Flickr