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It seems markets have a little fatigue in trade war induced selling.  The US decision to delay Huawei licenses did not surprise many, suggesting we could see China continue to steadily weaken the yuan in a tit-for-tat move.http://www.tourismlegal.com.au/  Financial markets are taking some relief from the stronger than expected Chinese trade and mixed inflation data.  Chinese exports to the US are falling but demand has been steady everywhere else.

The PBOC will become more concerned about PPI falling into negative territory, the first time it has been there in three years.  The profitability for industrial firms will take a hit and the broader outlook will continue to slump. The outlook for producer prices will not mimic happened what happened in 2012 which ended up seeing four years of sluggish global growth.  The case for enhanced easing from the PBOC is building as factory deflation is a big concern for them, but we may not see action until we figure out what happens with the trade war over the next few weeks.

Oil

Saudi Arabia is doing everything they can to stabilize oil prices.  Oil rallied briefly after Saudi Arabia signaled, they will limit exports next month.  Crude has fallen to seven-month lows and the selloff that stemmed from plummeting demand concerns and an unexpected pop with US stockpiles could see a resumption after this short squeeze ends.  The tentative oil rebound could be short-lived as the US-China trade dispute is providing no real reasons to be optimistic and it is unlikely energy ministers will come up with something before the next planned meeting which is not until the second week of September.

Gold

Gold seems immune to risk appetite and any positive developments in the US-China trade war. The financial markets may have overreacted with the PBOC daily fixing of the yuan, which was not as bad as most economists expected.

Today, gold initially sold off after optimism grew that China is will only depreciate their yuan slowly and despite another strong reading from the US labor market.  With so much negative yielding debt out there, gold should not see any major selloffs unless we see a major breakthrough with trade talks.