From Reuters:

Traders are pictured at their desks in front of the DAX board at the stock exchange in Frankfurt, Germany August 11, 2015. Reuters/Remote/Pawel Kopczynski

Stocks, the U.S. dollar, and emerging market currencies around the world remained under pressure for a second day on Wednesday after China’s yuan weakened again, one day after the country devalued its currency.

Germany’s 2-year yield fell to a new record low of minus 0.29 percent as investors feared the deflationary pressures of a slowdown in China’s economy would sap growth globally.

The prospect of a U.S. interest rate rise by the Federal Reserve next month dimmed as a result, dragging the U.S. dollar, financial stocks and U.S. Treasury yields lower. The ten-year U.S. Treasury yield fell to 2.045 percent US20YT=RR, the lowest in more than three months.

“China is still a big unknown, and the market is pricing in the worst,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.

On Wednesday, the People’s Bank of China (PBOC) set the yuan’s midpoint rate CNY=SAEC lower than Tuesday’s closing market rate, resulting in nearly a 4.0 percent devaluation of the yuan in two days against the U.S. dollar.

The yuan’s spot value CNY=CFXS fell further after Beijing released weak July output and investment data, trading as low as 6.4510 to the dollar.

Sources told Reuters that the move to devalue the yuan reflects a growing clamor within Chinese government circles for a devaluation of perhaps up…

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