The Peoples Bank of China (PBOC) surprised global markets with a 2% devaluation of the yuan. The move leaves the door open for possible future devaluing actions. The actions by the PBOC increases the likelihood of the U.S. economy importing deflation, as the U.S. dollar strengthens against the yuan. Fed Funds futures reacted this morning, repricing the likelihood of a September Federal Reserve hike from 48% yesterday to 44% today. U.S. Treasuries rallied 10 basis points to 2.13%, oil sold off hard hitting a six year low of $43.31/barrel, and the Dow dropped 210 points to 17,405.