In a new report out this week, Barclays analyst Hajime Kitano explains why China’s devaluation of the yuan is essentially quantitative easing and why the move could have major positive implications for U.S. stocks. After some disappointing economic data out of China in July, more QE measures could soon be on the way.

Devaluation QE

According to the Kitano, the decision to devalue the yuan was made in an attempt to stimulate inflation, which means that the move can be looked at as QE. Kitano notes that it is unclear whether the move will be effective in raising inflation expectations in China.

U.S. Impact

In the past, each of the four times that the Bank of Japan or the European Central Bank has…

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