By Chris Becker
The sudden devaluation in the Chinese Yuan has set a shock wave through markets, with emerging stock markets, Asian currencies and commodities slumping on the news. This set off a dour mood in Europe, where again intransigence in German parliament is stalling the next round of failed Greek bailouts. A huge run to safety in bond markets ensued with the 10 year Treasury yield almost hitting a two month low. The USD weakened slightly against the Euro, but remains steady.
Recapping Asia’s session, the Shanghai Composite had a scratch day to follow the near 5% rise on Monday and remains just below 4000 points. The Hang Seng also barely moved but other peripheral markets were badly shook up by the Yuan devaluation event including the Nikkei 225 which took back all the gains of Monday to finish at 20720 points. Futures are pointing to a lower open this morning on a poor lead from Wall Street as the bourse rejects the high at 20800 points:
