When we focus on the US-China trade war we sometimes see the commodity market disrupted, as we saw with crude oil and expectations of China not buying US crude. Note that Chinese purchases of crude oil was 247,000 barrels per day over the past month, the highest in 9 months. But in addition to the crude oil concerns, there is a more serious problem in China.
Food inflation has rocketed in China as food prices rocketed 9.1% in July from a year ago. This is a shocking fast rally and will have negative impact on Chinese society for years to come. Also, the People`s Bank of China fixed its midpoint for the yuan at 7.0136, setting it weaker than 7.0 for the second time this week. The Chinese currency came into focus this week and has gained a lot of attention in international markets as it weakened past 7.0 for the first time since 2008.
Japan saw the 3rd report of continued expansion in GDP with the period ending in June at 1.8% which was much better than the 0.4% forecast by analysts. Capital expenditure rose 1.5% against the previous quarter, while private consumption was up 0.6%.