I. Yesterday's News
International News
1. U.S. Treasury Secretary Steven Mnuchin said the Trump administration's timetable for tax reform is set to falter following setbacks in negotiations with Congress over healthcare, the Financial Times reported on Monday. Mnuchin also told the Financial Times he agreed with Trump's view that the dollar's strength in the short term was hurting exports, but said he saw the currency's strength over the long term as a positive. Mnuchin's speech played down President Donald Trump's view about the dollar, sending the U.S. dollar to session high of 109.05 against the yen. But the dollar index remained subdued.

2. North Korea did not respond this month to requests from senior Chinese diplomats, including the country's foreign minister, to meet North Korean counterparts, amid rising tension with the United States, Bloomberg reported on Monday. Citing unidentified sources, the report said China's special envoy for the North Korea nuclear issue, Wu Dawei, was the other official whose requests for meetings went unanswered.

3. The muted market reaction to recent hints from the U.S. central bank that reductions to its $4.5 trillion balance sheet could begin later this year suggests the policy shift may go smoothly after all, Federal Reserve Vice Chair Stanley Fischer said on Monday. He said lack of liquidity in markets is not currently a concern for drawing down portfolio, noting that reducing balance sheet is 'in effect' tightening monetary policy.

4. U.S. Vice President Mike Pence will meet Japanese Deputy Prime Minister Taro Aso on Tuesday, kicking off talks in Tokyo the White House hopes will open doors for U.S.-made products and attract Japanese infrastructure investment in the United States. The meeting is expected to reach agreement on principle and schedule of future talks, said a White House economic policy adviser.

5. The level of compliance among OPEC and non-OPEC oil producers with a global deal to cut output is very good, above 100 percent, but it is premature to talk about extending the deal, Saudi Energy Minister Khalid al-Falih said on Monday. Speaking to Al-Arabiya television, Falih said he saw a consensus within OPEC on stabilising the oil market, and that producers would do whatever was necessary to achieve that goal, whether it took six months or more. Producers will look at the expected condition of the market over the next two years, and will be cautious when making their decision on any extension, Falih told Arabiya.

6. HNA Airport Holding Group Co Ltd is close to buying out the stake that engineering conglomerate Odebrecht SA has in Brazil's second-busiest international airport, a person briefed on the matter said on Monday, partly solving an impasse with a government agency over licensing rights. The Chinese company, which is part of HNA Group Co Ltd, is currently conducting due diligence proceedings that could lead to the purchase of the approximately 30 percent stake that Odebrecht has in the Rio de Janeiro international airport, commonly known as Galeao, said the person. Odebrecht declined to comment. HNA and Changi press representatives did not immediately respond to e-mails seeking comment.

Domestic News
7. China's economy got off to a strong start in the first quarter, with GDP growing at 6.9 percent year-on-year, the highest in six quarters, on improvements in industrial production, investment and consumption. Higher prices gave a boost to industrial enterprises, and restocking led a new round of growth. An uptick in infrastructure and real estate investment have contributed to the growth. But the upbeat reading could be the highest throughout the year as China's real estate investment may continue to cool due to its tightening measures in recent months, and dying steam of PPI growth may suggest loss of momentum in industrial growth. Nevertheless, economic growth in 2017 will remain stable, pointing to a neutral monetary policy.

8. China will strictly control market access to the planned Xiongan New Area, and make a negative list to, in particular, prohibit large-scale property development and speculation, said China's Vice-Premier Zhang Gaoli. Hebei Daily said the Xiongan New Area will prohibit large-scale property development, explore innovative ways to use land and guarantee housing, and strictly control home prices.

9. The recent meeting between Chinese President Xi Jinping and his US counterpart Donald Trump decided to give themselves 100 days to discuss issues in trade. But some U.S firms concerned that the tight schedule would result in hasty decisions and President Trump's policy in curbing North Korea's nuclear and missile programme would hurt their benefits in China.

II. Market Overview
FX
1. Global Market
The dollar shook off early weakness against the yen on Monday after U.S. Treasury Secretary Steven Mnuchin said a strong dollar would be a good thing over a long period, but the greenback remained subdued against a basket of currencies amid geopolitical tensions. Earlier in the session the greenback retreated to 108.14 yen , its lowest since mid-November as rising tensions over North Korea stoked demand for the safe-haven Japanese currency. Against the yen, the U.S. dollar rose to 108.89. The dollar index, which measures the greenback against a basket of six major currencies, was down 0.27 percent at 100.29.

2. Home Market
China's yuan fell along with lower midpoint rates. The midpoint rates were set with clear intention to play down expectations over depreciation. Big banks continued to inject liquidity in the dollar on demand for the currency, making sure market prices in line with the midpoint rates. In near term, the market still has no direction.

Precious Metals
Gold pared gains from a five-month high on Monday, losing steam as U.S. Treasury yields turned higher and the dollar came off its lows, after rising geopolitical tensions over North Korea spurred earlier safe-haven buying in bullion. Spot gold was up at $1,284.30 an ounce, after hitting its highest since early November at $1,295.42. The most active U.S. gold futures for June delivery settled up 0.3 percent at $1,291.90.

Commodities
1.Crude Oil
Crude oil prices slipped 1 percent on Monday in subdued trading after a long Easter holiday weekend, on news of rising U.S. shale production and profit-taking following three straight weeks of gains. Benchmark Brent crude futures ended the session 53 cents lower at $55.36 while U.S. West Texas Intermediate (WTI) crude futures settled down 53 cents at $52.65 a barrel.

2.Base Metals
The market was closed for public holidays.

U.S. Treasuries
1. U.S. bonds
U.S. Treasury yields rose from five-month lows on Monday as stocks gained, reducing demand for safe-haven debt, and on reports that the Trump administration is likely to nominate a bank friendly official as the Federal Reserve's vice chairman for bank supervision. Benchmark 10-year notes were last down 7/32 in price to yield 2.252 percent, after dropping to 2.198 percent overnight, the lowest since Nov. 17.

2. Chinese bonds
China's interbank money rates, including the benchmark 10-year NDB bonds, rose about 5 bps in the first business session. The PBOC's renewal of the MLF to stabilize liquidity failed to ease the pressure from encouraging GDP in the first quarter. Government debt futures also extended losses.

Stock Market
1. U.S. Equities
U.S. stocks bounced back on Monday in a broad rally led by recently beaten-down bank and technology shares. Market focus shifted from geopolitical tension to earnings, with several Dow components, including Goldman Sachs, General Electric and Johnson & Johnson, scheduled to release results later this week. At the closing bell on Monday, the Dow Jones Industrial Average rose 183.67 points, or 0.9 percent, to 20,636.92, the S&P 500 gained 20.06 points, or 0.86 percent, to 2,349.01 and the Nasdaq Composite added 51.64 points, or 0.89 percent, to 5,856.79.

2. Hong Kong Equities
The market was closed for public holidays.

3. China Equities
China's stocks extended losses for the second consecutive day as the stocks of Xiong'an New Area theme fell across the board and recent winners continued to consolidate regardless of the higher-than-expected macro economic data. But the losses were pared led by banks. Investors shall closely watch the support a
t 3,200. The Shanghai Composite Index edged down 23.90 points or 0.74 percent at 3,222.17.