I. Yesterday's News
International News
1. Most Federal Reserve policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up, minutes from their last meeting showed. Treasury yields initially rose sharply after the release of the minutes but reversed course. The dollar briefly slipped while stocks on Wall Street fell. The minutes released on Wednesday of the March 14-15 policy discussion, at which the Fed voted 9-1 to raise interest rates, also showed that the rate-setting committee had a broad discussion about whether to phase out or halt reinvestments all at once.

2. The Bank of Japan will likely cut its rosy inflation forecast as early as this month, as slow wage growth and soft private consumption prevent prices from accelerating much this fiscal year, a former senior central bank executive said. Any such downgrade of the BOJ's 1.5 percent inflation target will make it difficult for the central bank to seek an early exit from its massive stimulus, said Kazuo Momma. He said it is thus a near-certainty the BOJ will miss its 2 percent inflation target during the next fiscal year ending in March 2019. He expects core consumer inflation to hover around 0.5 percent in the current fiscal year and accelerate only to around 1.0 percent the following year.

3. U.S. companies added 263,000 workers in March, higher than the reading in February, payrolls processor ADP said on Wednesday. ADP's March figure easily beat the median forecast of 187,000 increase among economists surveyed by Reuters. The Markit flash U.S. services PMI decreased to 52.8 in March, the lowest since last September. The Markit services new business index fell to the lowest of last March at 51.7. In a separate report, the U.S. ISM services index slipped to 55.2 in March, the lowest since last October, following 57.6 in February. The reading is also well below economists' forecast of 57.0.

4.The productivity of Britain's workforce grew at its fastest rate in more than a year in the final three months of 2016, though it remained lacklustre compared with before the financial crisis, official data showed on Wednesday. Output per hour rose by 0.4 percent in the fourth quarter of 2016 to give a year-on-year growth rate of 1.2 percent - both the fastest rates since the three months to June 2015. "Quarterly growth (in output per hour) of 0.4 percent is below the 1994 to 2007 average which provides little sign of an end to the UK's 'productivity puzzle'," the ONS said. Fourth-quarter unit labor costs rose by 2.1 percent compared with a year earlier, slowing from 2.5 percent in the previous three-month period.

Domestic News
5. China's State Council on Wednesday mapped out key tasks for economic system reform this year, stressing continued reform efforts to boost development and prepare for the tough job of ensuring employment. The country should continue to boost reform in key sectors with supply-side structural reform as the main theme, according to a statement released after a State Council executive meeting. In a separate report, China plans to levy consumption tax on mixed aromatics, asphalt, and light cycle oil starting from May, with tax rates of RMB 1,000 ($145.01) per tonne, sources familiar with the matter said.

6. China's Shandong Gold Mining Co Ltd is in advanced talks to buy a 50 percent stake in Barrick Gold Corp's Veladero gold mine in Argentina, people familiar with the process told Reuters even as the Canadian miner grappled with a pipe rupture at the site. Barrick is no longer in discussions with China's Zijin Mining Group Co Ltd about the Veladero mine stake sale, the sources said. A sale could fetch more than $1 billion, they added.

7. China will develop the Xiongan New Area, a landmark new economic zone near Beijing, to absorb non-capital functions from Beijing as one of the vital measures to advance the coordinated development of the Beijing-Tianjin-Hebei region, a media reported. For this purpose, China will reinforce coordinated regulation over the new area and its surrounding areas, and bring the advantages of each area into full play to avoid homogeneous competition.

8. China's central bank will pursue a crack down on illegal fund transfers via underground banks and offshore companies, the People's Bank of China (PBOC)  said in a statement, saying it will carry out pilot reform on executive penalty on bad checks.

9. Lu Lei, head of financial stability bureau of the People's Bank of China, said China should build macro cautious management framework on financial supervision to prevent systematic risks, and further improve a double-pillar regulation framework of “monetary policy + macro cautious policy” to make better use of policy tools, as the country's financial risks accumulate. China also need to maintain money supply, and make monetary policy committee a real policy-making department to regulate liquidity, Lu said.

II. Market Overview
FX
1. Global Market
The U.S. dollar tumbled from three-week highs on Wednesday, as minutes of the latest Federal Reserve meeting suggested the outlook for interest rates had not changed from what the Fed indicated last month after its rate hike decision. In late trading, the dollar was down 0.1 percent against the yen at 110.66 yen. The dollar index, which tracks the U.S. currency against a basket of six peers, fell 0.1 percent at 100.45, after hitting a three-week high. The euro was slightly higher at $1.0677.

2. Home Market
China's yuan rose along with higher midpoint rates in a tight range in the morning session of Wednesday. Proprietorial funds were cautious ahead of highly-anticipated meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping later this week. Exchange rates are unlikely to show tendency movement as forex buying had a little impact on the market.

Precious Metals
Gold fell from one-month highs on Wednesday after better-than-expected U.S. jobs data boosted U.S. bond yields and the dollar but losses were limited after minutes from the Federal Reserve's March policy meeting were released. Spot gold was down 0at $1,254.80 an ounce, while U.S. gold futures ended the session 0.8 percent lower at $1,248.50 an ounce.

Commodities
1.Crude Oil
Oil prices settled a shade firmer on Wednesday, easing from one-month highs, as support from an outage at the largest UK North Sea oilfield was offset by a surprise increase in U.S. crude inventories to a record high limited price gains. Brent futures ended the session up 19 cents, or 0.4 percent, at $54.36 a barrel after earlier touching $55.09, last traded on March 8. U.S. crude settled 12 cents, or 0.2 percent, higher at $51.15.

2.Base Metals
Copper rose 2 percent on Wednesday, reflecting strength across base metals following upbeat jobs data from the United States and the return of Chinese buyers after a two-day break. Three-month copper on the London Metal Exchange closed up 2 percent at $5,895 a tonne. LME nickel closed up 3.2 percent at $10,295 a tonne, driven higher by gains in the steel sector after a cyclone in Australia damaged transport routes for coking coal. Zinc ended the day at $2,778 a tonne, up 1.5 percent.

U.S. Treasuries
1. U.S. bonds
U.S. Treasury yields fell on Wednesday, with three- and five-year yields touching more than five-week lows after traders viewed the latest Federal Reserve meeting minutes as indicating the central bank was maintaining an outlook for a gradual pace of interest rate increases. Yields on Treasuries maturing in three and five years fell the most on the day and hit their lowest levels since Feb. 27 of 1.426 percent and 1.837 percent respectively. Benchmark 10-year Treasuries were last up 4/32 in price to yield 2.334 percent, from a yield of 2.350 percent late Tuesday, while 30-year yields were down 1 basis point at 2.981 percent.

2. Chinese bonds
China's interbank money rates rose slightly in the first business session after the public holidays. But the gains were almost pared before the noon bell. The benchmark 10-year contracts closed up by 0.05 percent after rising 0.39 percent at one point. Cash bonds yields pared losses after the renewed auction of government bonds.

Stock Market
1. U.S. Equities
Wall Street ended lower on Wednesday after a late-afternoon reversal following signals from the Federal Reserve that it could change its bond investment policy this year. Also investor concerns about the Trump administration's ability to deliver promised tax cuts were intensified by comments from lawmakers on deep divisions in Washington. In a heavy volume trading day, The Dow Jones Industrial Average ended down 41.09 points, or 0.2 percent, at 20,648.15, the S&P 500 lost 7.21 points, or 0.31 percent, to 2,352.95 and the Nasdaq Composite dropped 34.13 points, or 0.58 percent, to 5,864.48.

2. Hong Kong Equities
Hong Kong stocks eked out marginal gains on Wednesday, drawing inspiration from a mainland rally, but gains were limited as investors were cautious before a highly-anticipated meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping later this week. The benchmark Hang Seng index added 0.6 percent, to 24,400.80 points, while the Hong Kong China Enterprises Index gained 0.5 percent, to 10,365.32 points.

3. China Equities
China's stocks rallied 1.5 percent in large volume on Wednesday, boosted by the setup of Xiongan New Area. The Shanghai Composite Index edged up 47.80 points or 1.48 percent at 3,270.31. The trading volume of Shanghai A shares rose almost thirty percent to RMB 272.8 million from RMB 213.8 billion on Tuesday. The CSI 300 rose 1.38 percetn to 3,503.89.