I. Yesterday's News
International News
1. A French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack carried out days before presidential elections. The "cowardly killing" was took place on the Champs Elysees boulevard, in which the assailant was himself shot dead by police. Islamic State was responsible for the attack, the group's Amaq news agency said. It identified the attacker as one of its soldiers naming him as Abu Yousif, the Belgian.

2. President Donald Trump moved on Thursday against China and other exporters of cheap steel into the U.S. market, launching a federal investigation to determine whether foreign-made steel threatens U.S. steelmakers and national security. Winning praise from U.S. companies that are constantly fighting with foreign competitors, Trump invoked a rarely-used trade law that raises the possibility of new tariffs. The action triggered a rally in U.S. steel stocks.

3. New applications for U.S. jobless benefits rose slightly more than expected last week, but a drop in the number of Americans on unemployment rolls to a 17-year low suggested the labor market continues to tighten. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 244,000 for the week ended April 15, the Labor Department said. The labor market's strength was underscored by other data on Thursday showing manufacturers in the mid-Atlantic region hired more workers this month and increased working hours, even as factory activity slowed from March's brisk pace. In a separate report, the Philadelphia Federal Reserve said its index of current manufacturing activity fell to a still-high reading of 22.0 this month from 32.8 in March. The current employment index rose 2.4 points to its highest level since May 2011.

4. Dallas Federal Reserve President Robert Kaplan said on Thursday that two more interest rate hikes this year remains possible but that the U.S. central bank has the flexibility to wait and see how the economy unfolds. "As soon as later this year or maybe early next year, we should begin the process of letting the balance sheet roll off," he said, adding that any plan should be made public at least a couple of months in advance. He also expected a better economic growth than data showed, but his estimate did not take fiscal policy into consideration.

5. Germany's economic upswing is likely to gain further momentum in the first quarter of this year, pushing up tax revenues by more than expected, the Finance Ministry said on Friday. The ministry said in its monthly report that recent production data, incoming orders and rising employment levels pointed to a pickup in activity in the first three months of this year. From January to March, tax revenues of the federal government and the 16 regional states rose 6.8 percent year-on-year, the ministry said. That is more than double the projected rise of 2.9 percent for the whole year.

6. Centrist Emmanuel Macron clung on to his status as favourite to win France's presidential election in a four-way race that is too close to call, as the camp of far-right challenger Marine Le Pen ramped up its eurosceptic rhetoric in a row with Brussels. A closely-watched Cevipof opinion poll published on Wednesday showed frontrunners Macron and Le Pen both losing some momentum ahead of Sunday's first round, and conservative Francois Fillon and far-left candidate Jean-Luc Melenchon still in contention for the second round run-off.

7. Prime Minister Theresa May will make a formal pledge ahead of the June 8 election to end European Union free movement of people into Britain, the Daily Mail newspaper reported, citing unidentified party sources. May will also include pledges in her election manifesto to pull out of both the EU single market and European Court of Justice, the newspaper said.

8. Leading Gulf oil exporters Saudi Arabia and Kuwait gave a clear signal on Thursday that OPEC plans to extend into the second half of the year a deal with non-member producers to curb supplies of crude. Consensus is growing among oil producers that a supply restraint pact that started in January should be prolonged after its initial six-month term, Saudi Energy Minister Khalid al-Falih said. Kuwait's oil minister Essam al-Marzouq said he expected the agreement to be extended. If OPEC and non-OPEC oil producers decide to extend their six-month agreement on output cuts, the cuts may become less deep as oil demand is expected to be stronger for seasonal reasons in the second half of 2017, Marzouq said.

Domestic News
9. China's State Council, or cabinet, on Wednesday said at its executive meeting that  the total tax reduction will amount to more than 380 billion yuan this year after the new measures go into effect. First, the country's nationwide VAT reform will proceed with a simpler structure. Starting this July, four VAT brackets will be streamlined into three, with tax rates of 17 percent, 11 percent and 6 percent targeting different products. Value-added tax for agricultural products and natural gas will be cut to 11 percent from 13 percent, effective from July 1, 2017.

10. The State Council, China's cabinet has announced plans to promote employment, the country's top policy priority, across the nation. It further stated if new urban jobs dramatically declined or unemployment rates sharply rose, the government should be responsible for stepping up fiscal and monetary policy support to ensure stable employment and economic growth throughout the country.

11. Signs of seasonal recovery in China's economic growth set a strong footing for structural reform, said Ma Jun, Chief Economist of the Research Bureau of the People's Bank of China. Regulators will take into full consideration the impact on market by related policy as policy implementation is a gradual process, Ma said.

II. Market Overview
FX
1. Global Market
The euro held near a three-week high against the U.S. dollar on Thursday as some traders shut down broad bets against the common currency ahead of the first round of the French presidential elections on Sunday. The euro was up 0.09 percent against the dollar at $1.0719 after hitting a three-week high of $1.0777 earlier in the session.
The dollar index, was up 0.06 percent at 99.796. Sterling was up 0.29 percent at $1.2814. Meanwhile, commodity currencies, including the Aussie and the New Zealand dollars recovered ground against the greenback. Canada's dollar steadied.

2. Home Market
China's yuan kept going sideways with lower midpoint rates. The decline of midpoint rates were much slower than expected, showing clear intention by regulators to keep rates steady. In near term, the market still has no direction.

Precious Metals
Gold steadied on Thursday after its biggest one-day drop in more than six weeks, with a retreat in the dollar arresting the slide, though moves were muted as markets await the outcome of the looming French presidential election. Spot gold was up at $1,281.35 an ounce. U.S. gold futures for June delivery settled up 0.03 percent at $1,283.80.

Commodities
1.Crude Oil
Oil prices ended mixed on Thursday after a seesaw trading session, as investors weighed rising U.S. production against geopolitical uncertainties and comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely. The benchmark U.S. crude contract, West Texas Intermediate futures, settled down 17 cents for a fourth straight day of losses, to $50.27 a barrel. Brent futures posted modest gains, however, ending up 6 cents to $52.99 a barrel.

2.Base Metals
Copper, zinc and other base metal prices gained on Thursday as investors, speculators and consumers resumed buying after recent losses, expecting increased seasonal demand. Three-month copper closed up 1.2 percent at $5,623 a tonne. Zinc was the biggest LME gainer with a jump of 3.2 percent to close at $2,632. LME aluminium climbed 2.1 percent, the biggest daily price gain in the metal since November, to end at $1,942.

U.S. Treasuries
1. U.S. bonds
U.S. Treasury yields rose on Thursday as investors waited on the results from the French presidential election this weekend and as rising risk appetite boosted stocks, after yields fell earlier and broke below key technical resistance. Benchmark 10-year notes have struggled to stay below technical resistance at around 2.19 percent, which was tested in overnight trading. The 10-year note fell 12/32 in price to yield 2.25 percent.

2. Chinese bonds
China's interbank money rates weakened on Thursday with the benchmark 10-year NDB bonds rising about 2-3 bps. The IRS recorded similar gains, while benchmark government debt futures fell across the board.

Stock Market
1. U.S. Equities
U.S. stocks rallied on Thursday, with the Nasdaq closing at a record, as a round of solid earnings led by American Express pushed equities higher. The Dow Jones Industrial Average rose 174.22 points, or 0.85 percent, to 20,578.71, the S&P 500 gained 17.67 points, or 0.76 percent, to 2,355.84 and the Nasdaq Composite added 53.74 points, or 0.92 percent, to 5,916.78.

2. Hong Kong Equities
Hong Kong stocks rebounded modestly on Thursday along with global equity markets, though gains were capped by uncertainty over the French presidential election at the weekend and tensions with North Korea. Lower oil prices also dragged on shares of energy companies. The Hang Seng index rose 1.0 percent to 24,056.98 points, while the China Enterprises Index gained 0.7 percent to 10,056.17.

3. China Equities
China's stocks edged slightly higher on Thursday, snapping a four-day losing streak, led by biochemical, food & beverage and other defensive sectors. Major indexes are expected to steady after extended losses. But losing liquidity and heavy selling would keep the market in check. The Shanghai Composite Index edged up 1.41 points or 0.04 percent at 3,172.10.