European cash and U.S. futures markets are extending the selloff started during the past week of trading. The reason behind this selloff is rather strange -- the better-than-expected nonfarms payroll data seen on Friday has raised expectations for a move on interest rates from the Federal Reserve, thus helping the U.S. dollar strengthen.

The strength of the U.S. dollar had an important influence in the commodity markets, where raw materials plunged at an impressive speed in Friday and Monday trade. Since Friday's open, gold has lost almost 6%, while crude oil has shed $3, or about 4%, since the high touched in Friday trade. The vast majority of declines in Monday European trade came from the energy and raw materials companies.

However, this selloff should be only temporary, since the positive news coming from the labor market shows that the economy is expanding. An expanding economy, coupled with the current low level of interest rates that even with a rate increase are at historic lows, might provide a substantial boost to the balance sheets of most companies. At the same time, an expanding economy increases the demand for commodities, thus putting upside pressure on prices.

In European trade, the DJ Stoxx 50, which tracks the performance of the most liquid 50 European companies, lost 0.95%. Since the session started, the U.K. FTSE and the German Dax shed 0.85%, but Sweden's OMX 30 index lost only 0.05%, and it actually managed to turn into the green for a short period. Monday's selloff was more pronounced in emerging European trade, with the Czech Republic losing 1.45% and Romania's BVB dropped 2.50%.

Raw materials and energy companies shed the most points in European trade, declining 1.40% and 1.75%, respectively. To make matters worse, the banking sector lost approximately 1%. Raw materials and banking companies have the biggeest weight in the European markets, and most of the time the direction of trading of these two sectors dictates the general direction of the market.

Eurasia, Randgold, Fresnillo, Petrofac and Lonmin were the biggest decliners in the FTSE 100 index, dropping between 1.50% and 3.50%. The U.K. banking sector also dropped, with Lloyds, RBS and Barclays moving down hand in hand. Since the day started, the three banks erased values by approximately 1.80%. In the Swiss stock market, the only two sectors that managed to advance were consumer services and technology.

The macroeconomic calendar was light in European trade, but ahead investors prepare for speeches from Jean-Claude Trichet of the European Central Bank and Ben Bernanke of the Fed, scheduled at 8:00 a.m. EST and noon, respectively.

Crude oil was recently trading at $74.75 a barrel, lower by 85 cents. Gold was recently trading lower by $24.50 to $1144.90.