Markets around the world fell with stocks, the dollar and market currencies after yuan devaluation:
- Germany's 2-year yield fell to a new record low.
- Industrial commodities such as oil and copper fell.
- U.S. interest rate hike next month dimmed: the probability of the Federal Reserve raising interest rates next month faded from about 60 percent to about 40 percent.
- U.S stock futures fell.
- The U.S. dollar failed.
- The euro rose.
"If the Fed is still intent on raising rates in September ... then it would suggest that the agenda was being driven by the need to get off ZIRP (zero interest rate policy) rather than a true evaluation of the economic outlook. At this juncture, they should be looking at hawkish quantitative easing rather than dovish tightening," Deutsche Bank strategists said in a note.
