I. Yesterday's News
International News
1. U.S. President Donald Trump revved up supporters on Tuesday with a defense of his response to a white supremacist-organized rally in Virginia and a promise to shut down the U.S. government if necessary to build a wall along the border with Mexico. Police used pepper spray to disperse crowds after protesters threw rocks and bottles outside the convention center where Trump spoke, police said. Trump repeatedly singled out the media for criticism of how it covered the violence in the Virginia college town of Charlottesville and the resulting political fallout, saying many reporters ignored his condemnation of white supremacists, including the Ku Klux Klan.

2. U.S. President Donald Trump warned on Tuesday he might terminate the NAFTA trade treaty with Mexico and Canada after three-way talks failed to bridge deep differences. "Personally, I don't think we can make a deal. I think we'll probably end up terminating NAFTA at some point," Trump said at a political rally in Phoenix, Arizona. Suggesting a termination might help jumpstart the negotiations, Trump said: "I personally don't think you can make a deal without a termination." The talks will move to Canada later in September, then return to the United States in October, with additional rounds planned for later this year.

3. Euro zone business growth maintained a solid clip in August, driven by the best manufacturing performance in 6-1/2 years, easily offsetting a mild slowdown in services growth and keeping overall activity on steady path, a key private sector survey showed on Wednesday. The Flash Eurozone Composite Purchasing Managers' Index (PMI) edged up slightly to 55.8 in August from 55.7, beating the median Reuters Poll estimate of 55.5. Germany's Markit's flash composite Purchasing Managers' Index (PMI) rose to 55.7 from its 10-month-low of 54.7 in the previous month. French Markit's flash composite PMI was flat at 55.6, slightly higher than analysts' forecast of 55.5.

4. New U.S. single-family home sales unexpectedly fell in July, dropping to their lowest in seven months, which could raise concerns of a slowdown in the housing market recovery. The Commerce Department said on Wednesday new home sales tumbled 9.4 percent to a seasonally adjusted annual rate of 571,000 units last month, the lowest level since December 2016. The percentage drop was the largest since August 2016. Coming on the heel of data this month showing a plunge in both housing starts and permits in July, the unexpected decline in new home sales suggests the housing market could be cooling. The PHLX index of housing stocks fell 0.49 percent.

5. Credit ratings agency Fitch Ratings on Wednesday said a failure by U.S. officials to raise the federal debt ceiling in a timely manner would prompt it to review the U.S. sovereign rating, "with potentially negative implications." Fitch, which currently assigns the United States its highest rating — "AAA" — said in a statement that the prioritization of debt service payments over other government obligations, should the debt ceiling not be raised, "may not be compatible with 'AAA' status." Without the ability to sell more debt, the government is expected to run out of cash, possibly in early October, and faces the risk of not paying the interest and principal on its debt on time. The United States defaulting on its bonds, traders fear, would rattle financial markets worldwide.

Domestic News
6. China will further the SOE reform, and hear the report on the enforcement of equity and option right encouragement, Premier Li Keqiang said at a State Council executive meeting. China will also further reduce leverage at central State-owned enterprises and push forward the debt-for-equity swaps to cut local government debt, in addition to developing new industry and new mode, and improving conventional momentum by implementing “Made in China 2025” and “Internet+” initiatives.

7. China will dispose risks in an orderly manner, especially the liquidity risks triggered by incidents in some companies, to ensure early discovery and pre-warning, said Chen Wenhui, vice chairman of China Insurance Regulatory Commission (CIRC). He said big companies with serious loopholes shall make contingency plan by adopting “one firm one strategy” to isolate risks and take the role of insurance guarantee fund into full play.

8. China will continue to implement a plan to control the country's major air pollutants, PM2.5, reducing the emissions of nitrogen oxides (NOx) and volatile organic compounds (VOC), the Ministry of Environmental Protection (MEP) said. In the next step, China will also take measures to simultaneously curb O3 pollution, with emphasis on enforcement of the 13th Five Year Plan on tackling pollution.

9. China's JD.com Inc is in advanced talks with Thailand's Central Group to launch an e-commerce joint venture in Thailand with a planned total investment of $500 million, people familiar with the matter told Reuters. The venture will help China's second largest e-commerce retailer expand its overseas business beyond Indonesia and boost its presence in Southeast Asia. The joint venture with Central Group will focus on e-commerce and finance sectors, one of the sources said. The deal has yet to be finalized as the companies are unable to agree on ownership terms, two sources said. JD.com and Central Group declined to comment on the joint venture.

II. Market Overview
FX
1. Global Market
The dollar fell on Wednesday in a generally risk-averse market after U.S. President Donald Trump suggested a shutdown of the government was possible and threatened to terminate the North American Free Trade Agreement. In late trading, the dollar fell 0.5 percent to 108.97 yen , as the dollar index slid 0.4 percent to 93.151. The euro rose 0.5 percent to $1.1818.

2. Home Market
China's yuan rose against the U.S. dollar late on Wednesday, while the midpoints lowered slightly. Yuan followed the weaker dollar index, but extended losses in the afternoon session after the euro gained. The highlight will be the annual central bankers meeting held in Jackson Hole, Wyoming, Thursday.

Precious Metals
Gold prices edged up on Wednesday, drawing support from political uncertainty in the United States and the weak dollar before a major central banking conference there this week. Spot gold was up 0.4 percent at $1,289.68 an ounce, hovering below last week's nine-month-high at $1,300.80. U.S. gold futures settled up 0.3 percent at $1,294.70.

Commodities
1.Crude Oil
Oil prices rose on Wednesday after U.S. crude inventories declined for the eighth straight week and as a storm approached the Gulf Coast with the potential to disrupt oil and refined products output. Brent crude futures settled up 70 cents to $52.57 a barrel, while U.S. West Texas Intermediate crude futures were trading at $48.41, up 58 cents.

2.Base Metals
Nickel prices surged to an eight-month high on Wednesday on expectations of strong demand from top consumer China, supply concerns and declining stockpiles. Three-month nickel on the London Metal Exchange closed up 2.2 percent at $11,660 a tonne after touching $11,690, the highest since Dec. 7. Benchmark copper finished 0.2 percent lower at $6,565. Benchmark aluminium closed 1.1 percent higher at $2,097 a tonne.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury yields fell on safety buying on Wednesday after President Donald Trump said that he would be willing to risk a government shutdown to secure funding for a border wall, raising fears that a battle to raise the debt ceiling could delay payments on some bonds. Benchmark 10-year notes gained 12/32 in price to yield 2.17 percent, down from 2.22 percent on Tuesday. Yields on Treasury bills that are due near when the government is expected to run out of money also jumped. Yields on bills due Oct. 5 rose to 1.155 percent, the highest level since Aug. 10.

2. Chinese bonds
Yields of China's inter-bank cash bonds tracked yesterday's downward trend that appeared late in the session, but in a limited range. Cash bond prices rebounded modestly after accelerated losses in commodities spurred market sentiment.

Stock Market
1. U.S. Equities
U.S. stocks closed lower on Wednesday as investors grappled with a threat from President Donald Trump to shut down the government if Congress fails to fund a Mexico border wall. The Dow Jones Industrial Average fell 87.8 points, or 0.4 percent, to 21,812.09, the S&P 500 lost 8.47 points, or 0.35 percent, to 2,444.04 and the Nasdaq Composite dropped 19.07 points, or 0.3 percent, to 6,278.41.

2. Hong Kong Equities
Hong Kong was suspended Wednesday as Typhoon Hato lashed southern China.

3. China Equities
The Shanghai Composite Index inched down on Wednesday, snapping a four-day winning streak. Environment protection and consumer sector surged, while some bank names also firmed. But bumper resistance of 3,300 kept the index in check, sending it lower late in the session. Market is expected to remain rangebound in the near term.