Why the Falling Yuan is Causing a Selloff
What’s in Today’s Report:
- Why the Falling Yuan is Causing a Selloff
- Weekly Market Preview
- Weekly Economic Cheat Sheet
Futures and global markets are sharply lower as the U.S./China trade war intensified over the weekend.
China allowed the yuan to weaken below the psychologically important level of 7/dollar on Monday, signaling a likely acceptance of a long U.S./China trade war.
Economically, global July composite PMIs were better than feared and generally in-line with expectations, while the British services PMI easily beat estimates (51.4 vs. (E) 50.2).
Today, the key report is the ISM Non-Manufacturing PMI (E: 55.5) and the market will be looking for solid data.
Regarding U.S./China trade, undoubtedly there will be tweets flying today but there is a chance for some good news on U.S./China trade this week. The Commerce Department may grant waivers for U.S. companies to do business with Huawei, and if that happens, it’ll help offset some of this recent trade escalation.
