FX Insights

China’s devaluation in its currency continues to reverberate through markets as the PBoC, for the second straight day, has set the reference rate for the CNY at a much lower level against the USD. Equities traded with a negative risk bias on Tuesday whilst the Treasury curve was aggressively bid - the yield on the 2-year note and the yield on the 10-year bond settling at 0.72% and 2.23% respectively. Significant weakness was also seen within the commodity space, including a close to 4% decline in WTI crude to a new low.