August 11, 2015 G-SHOCK (Gold, Stocks, Housing, Oil, Currencies, Key Rates)

Gold

Gold stayed relatively flat today during its strength cycle as China has just devalued its currency which will cause commodities denominated in the US dollar to be more expensive. I wouldn't be buying gold right now as even in the strength cycle it should only last until December but with further downside to reach a bottom within the next year or two.

Stocks

Stocks are generally down today in North America due to concerns of slowing economic activities from China's recent surprise. However, the next four months economic numbers should get better as the start of school should encourage consumer spending giving relief to a slowing economy.

Oil

The surprise in currency devaluation in China caused oil to give up all gains from trading on Monday as the world's number two economy is slowing in growth and the price of oil in the U.S. has just gotten more expensive relative to China's oil.

However, the longer term outlook should show that the supply in oil will drop (most likely will be shown in this weeks or next weeks EIA report coming out tomorrow) as at these oil prices, many oil fracking companies are not profitable. Besides, the implementation for lowering interest rates and devaluing the currency should drive better economic stats in the coming months for China which will raise the price for oil.

Currencies

China Devalues Yuan: People's Bank of China has sharply weaken the renminbi’s “daily fix” to Rmb6.2298 against the dollar on August 11th, compared with a Rmb6.1162 the day before in a response to weakening exports and rising deflation risk.

USD stays strong as it continues to stay as the one economy closest to raising rates among its G20 peers.

Key Rates

US Unemployment Rate Steady at 5.3% in July
Euro Area Unemployment Rate Unchanged at 11.1%
China Moves to Devalue Yuan
China Inflation Rate Up 1.6% in July
BoJ Keeps Monetary Policy Unchanged
German Trade Surplus Hits Record High in June
UK Trade Deficit Widens to £1.6B in June
Canada Unemployment Rate Unchanged in July

Hong Kong Trade Deficit Widens in June