Brent crude plunged close to 5% to an eleven-year low as a stand-off between Iran and Saudi Arabia finished off any hopes of an OPEC agreement to cut production in order to boost prices. Brent futures lost $1.80 to $34.62 a barrel. U.S. West Texas Intermediary (WTI) crude futures tumbled $1.40, or about 4% to $34.58 a barrel.

European shares took a hit after a private survey for the Chinese services sector showed the weakest growth in 17 months, and after China's central bank lowered the midpoint of the yuan further, in an attempt to boost exports, but one that would make imports more expensive and less attractive. The pan-European index FTSEurofirst tumbled to a three-week low at 1,385, down a heavy 1.80% for the day. Britain's FTSE gave up a hundred points, or 1.70% to 6,031, while Germany's DAX tumbled 190 points, or 1.84% to 10,119. France's CAC dived 90 points, or close to 2.0% to a three-month low at 4,450.

Dollar nudged higher after a survey showed that private sector added 257K new jobs in December, comfortably surpassing expectations of a 193K addition. The dollar index rose 0.10% to 99.59. Dollar was up a similar percentage against the euro at 1.0739, while hitting a nine-month high against sterling at 1.4624. Dollar remained weak against the resurgent yen however, trading at an 11-week low at 118.60.

Gold made robust gains as investors crowd to buy the safe haven, with the futures up 13 dollars, or 1.22% to $1,091 an ounce. Silver tagged along, rising 14 cents, or 1.03% to $14.11 an ounce. Industrial metals weren't as lucky however, with Copper futures down 0.63% to $2.083 a pound.