I. Yesterday's News
International News
1. One of the Federal Reserve's most influential members expects to raise interest rates once more this year, and to soon begin shedding some of the Fed's bond holdings, according to comments on Monday that pushed back on doubts in financial markets. In an interview with the Associated Press, New York Fed President William Dudley, a close ally of Fed Chair Janet Yellen, also praised the Trump administration for not "politicizing" the U.S. central bank's decisions as some members of Congress have done in recent years. "It depends on how the economic forecast evolves," Dudley told the AP. "If it evolves in line with my expectations ... I would be in favor of doing another rate hike later this year."

2. North Korea's leader received a report from his army on its plans to fire missiles toward Guam and said he will watch the actions of the United States for a while longer before making a decision, the North's official news agency said on Tuesday. U.S. Joint Chiefs of Staff Chairman Joseph Dunford said on Monday U.S. military options being prepared against North Korea would be for when diplomatic and economic sanctions failed, South Korea's president's office said on Monday.

3. President Donald Trump on Monday will order his top trade adviser to determine whether to investigate Chinese trade practices that force U.S. firms operating in China to turn over intellectual property, senior administration officials said on Saturday. The move, which could eventually lead to steep tariffs on Chinese goods, comes at a time when Trump has asked China to do more to crack down on North Korea's nuclear missile program as he threatens possible military action against Pyongyang. An administration official, however, insisted diplomacy over North Korea and the potential trade probe were "totally unrelated," saying the trade action was not a pressure tactic.

4. Industrial output in the 19 countries sharing the euro currency fell by more than expected in June, as the production of capital and durable goods fell following sharp increases in the previous month, European statistics office Eurostat said on Monday. Overall, industrial production in the euro area fell by 0.6 percent in June but still increased by 2.6 percent on an annual basis, staying below the 0.5 percent drop forecast in a Reuters poll of 32 economists. For May, Eurostat revised its overall estimates downwards by 10 basis points, to 1.2 percent for the monthly and 3.9 percent for the annual reading.

5. Japan's economy expanded at the fastest pace in more than two years in the second quarter as consumer and company spending picked up, highlighting a long-awaited bounce in domestic demand. Gross domestic product expanded an annualised 4.0 percent in April-June, government data showed, more than the median estimate for 2.5 percent annualised growth and the biggest increase since January-March 2015. It is its longest uninterrupted run of growth in a decade.

Domestic News
6. China's economy appears to be cooling again with the latest broad batch of data appearing to retrace much of momentum gained in recent months. The key monthly figures released by the National Bureau of Statistics show industrial production, investment and retail sales all slipped back in July and were all lower than expected. China's economy is heading for a steady but slower growth in the second half of this year.

7. Real estate investment in China rose 7.9 percent in January-July period from the same period a year earlier, easing from 8.5 percent growth in the first half of 2017, official data showed on Monday. New construction starts measured by floor area were up 8 percent in January-July, compared with a 10.6 percent rise in the first six months this year, the National Bureau of Statistics (NBS) said.

8. China's urban surveyed unemployment rate was around 5.1 percent last month. The surveyed rate in 31 major Chinese cities continued to stay at a relatively low level of less than 5 percent.

9. China's finance ministry said that the country's general public budget revenue this year was 1.6457 trillion yuan, a 11.1 percent increase from last year; while general public budget spending was 1.3496 trillion yuan, rising 5.4 percent compared with last year. Month-on-month, spending growth slipped due to accelerated growth in previous months and some funds had been disbursed.

II. Market Overview
FX
1. Global Market
The dollar rose broadly on Monday as traders unwound bearish bets against the U.S. currency that have come in the wake of increasing tensions with North Korea and underwhelming inflation data. The absence of further abrasive rhetoric by U.S. President Donald Trump and North Korean leader Kim Jong Un over the weekend helped bring investors back to the dollar and out of safe-haven currencies such as the Japanese yen and Swiss franc, analysts said. The dollar index, which tracks the greenback against six major currencies, was last up 0.4 percent. Against the Swiss franc the dollar was up 1.1 percent, on pace for its largest one-day percentage gain in nearly three weeks.

2. Home Market
China's yuan rose against the U.S. dollar in the morning session on Monday, with its guidance hitting a 11 month high. The midpoint rates added only 41 pips after the dollar index tumbled last Friday, a sign perceived by institutional investors that regulators will continue to lower its guidance to curb sharp appreciation of yuan. Gains were caped by rising buying bets.

Precious Metals
Gold prices fell by half a percent on Monday, retreating from last week's two-month highs, as dollar strength and the easing of tensions between the United States and North Korea pushed prices lower. Spot gold fell 0.5 percent to $1,281.86 an ounce. U.S. gold futures for December delivery fell 0.3 percent to settle at $1,290.40.

Commodities
1.Crude Oil
Oil prices tumbled more than 2.5 percent on Monday in volatile trade, as dollar strength and weak domestic demand data in China hammered prices that had received a short-lived boost on concerns about potential reductions in crude supply from Libya. Global benchmark Brent crude futures settled down $1.37 or 2.63 percent at $50.73. U.S. West Texas Intermediate crude futures settled down $1.23, or 2.52 percent at $47.59 a barrel.

2.Base Metals
Aluminium fell on Monday as traders booked profits after prices soared to a 2-1/2 year high on Friday and factory data from top producer China fell short of market expectations. Benchmark aluminium on the London Metal Exchange ended 0.9 percent lower at $2,023 a tonne. Benchmark copper ended 0.2 percent down at$6,397 a tonne. Prices hit their highest in more than 2-1/2 years on Aug. 9 at $6,515 and are up almost 8 percent this quarter.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury yields rose on Monday, with benchmark yields bouncing from six-week lows on signs of easing tensions between the United States and North Korea, driving investors to pare holdings of low-risk government debt. At 1925 GMT, the yield on benchmark 10-year Treasury notes was 2.2237 percent, up from late on Friday, when it hit a six-week trough at 2.182 percent. Two-year Treasury yields increased to 1.3222 percent.

2. Chinese bonds
China's Finance Ministry said it will sell 1.52 billion yuan of 10-year T-bonds on Tuesday to improve liquidity in secondary market.

Stock Market
1. U.S. Equities
U.S. stocks recovered further on Monday from last week's selloff, with the S&P 500 posting its biggest one-day percentage gain since April as worries eased about a conflict between the United States and North Korea. Technology shares were among stocks giving the index its biggest boost. Apple was up 1.5 percent, while the S&P 500 technology index rose 1.6 percent. The Dow Jones Industrial Average rose 135.39 points, or 0.62 percent, to close at 21,993.71, while the S&P 500 gained 24.52 points, or 1.00 percent, to 2,465.84, just the third day this year where the S&P 500 posted at least a 1 percent gain. The Nasdaq Composite added 83.68 points, or 1.34 percent, to 6,340.23.

2. Hong Kong Equities
Hong Kong shares finished higher on Monday as the weekend did not bring any increase in the tensions between the United States and North Korea, stabilising sentiment and luring investors back into the market. As in mainland markets, investors largely ignored data on Monday showing that weak economic data in China. The Hang Seng index rose 1.4 percent to 27,250.23 points, while the China Enterprises Index gained 1.3 percent to 10,707.24 points.

3. China Equities
China's stocks rebounded strongly in shrinking volume, regaining most ground lost last Friday led by TMT sector. Major indexes are expected to steady with strong support at 3,200. The benchmark Shanghai Composite Index rose 28.82 points or 0.90 percent to 3,237.36. The CSI index climbed 1.30 percent to 3,694.68.