I. Yesterday's News
International News
1. U.S. President Donald Trump on Monday opened the door to meeting North Korea's Kim Jong Un, even as Pyongyang suggested it would continue its nuclear weapons tests. Trump did not say what conditions would need to be met for any such meeting to occur or when it could happen, but the White House later said North Korea would need to meet many conditions before a meeting could be contemplated. “Clearly conditions are not there right now,” White House spokesman Sean Spicer said. Early on Monday, North Korea said it will bolster its nuclear force "to the maximum" in a "consecutive and successive way at any moment" in the face of what it calls U.S. aggression and hysteria.

2. The Institute for Supply Management (ISM) said its index of national factory activity dropped to a reading of 54.8 last month, the weakest reading since December, suggesting U.S. factory activity slowed in April while consumer spending was unchanged. The personal consumption expenditures (PCE) price index excluding food and energy slipped 0.1 percent, the first and largest drop since September 2001.
 and a key inflation measure recorded its first monthly drop since 2001. Economists still expect an interest rate increase in June as the labor market tightens. After the report, U.S. Treasury prices slipped, the U.S. Dollar fell slightly, while U.S. Equities were little changed.

3. U.S. Secretary of the Treasury Steve Mnuchin said on Monday that it could take up to two years to have economic growth reach three percent and that tax cuts and regulatory relief will help get there. U.S. Treasury Secretary Steven Mnuchin said the government is looking into the issuance of ultra long-term bonds, or those with maturities beyond 30 years. The yield on U.S. 30-year bond rose to a three-week high, while that of 10-year notes touched session peaks after Mnuchin's comments.

4. Japanese manufacturing activity expanded at a stronger pace in April than the previous month as export orders increased, a revised survey showed on Monday, suggesting firms' output remains on track to rise thanks to overseas demand. The Final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) was 52.7, slightly below a preliminary 52.8 but still above the 52.4 notched in the previous month. The index remained above the 50 threshold that separates expansion from contraction for the eighth consecutive month. The final index for new export orders was 53.3, less than the flash reading of 53.9 but still growing faster than 51.9 in the previous month due to demand from Southeast Asia, the survey showed. Interestingly, while input prices rose sharply due to higher raw material costs, panelists also sought to protect margins by raising their charges.

5. Negotiators in the United States Congress reached a deal late on Sunday on around $1 trillion in federal funding that would avert a government shutdown later this week, while handing President Donald Trump a downpayment on his promised military build-up. The full House of Representatives and Senate must still approve the bipartisan pact, which would be the first major legislation to clear Congress since Trump became president on January 20th. Prompt passage of the legislation was expected this week. The funds would pay for an array of federal programs from airport and border security operations to soldiers' pay, medical research, foreign aid, space exploration, and education.

6. A week before the decisive second round in France's presidential election, many voters are sceptical that either of the two candidates can solve chronic unemployment or tackle security concerns, a poll published on Sunday found. The Ifop survey for the Journal du Dimanche highlights two key battlegrounds as centrist presidential candidate Emmanuel Macron and far-right opponent Marine Le Pen enter a final week of campaigning - France's economy and borders. Polls predict that Macron, a former economy minister, will win the May 7 run-off with about 59-60 percent. But the momentum has recently been with Le Pen, who has clawed back about five percentage points over the past week.

Domestic News
China's market was closed for the Labor Day holiday.

II. Market Overview
FX
1. Global Market
The U.S. dollar rose against the yen on Monday after investors shrugged off weak U.S. factory activity and inflation data on the view that it was unlikely to impede a June interest rate increase from the Federal Reserve. The dollar was last 0.2 percent higher against the yen at 111.77 yen and near a one-month high of 111.92 touched earlier in the afternoon. The euro was last up just 0.1 percent against the dollar at $1.0901, after touching a session high of $1.0923 shortly after the data. The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.05 percent at 99.101.

2. Home Market
China's market was closed for the Labor Day holiday.

Precious Metals
Gold prices fell 1 percent to a three-week low on Monday, pressured by rising U.S. stocks and an agreement that averted a U.S. government shutdown, dampening demand for non-interest paying bullion. Spot gold was down at $1,256.30 an ounce, after dropping to $1,253.66. U.S. gold futures settled down 1 percent at $1,255.50. Spot silver dropped to $16.84 an ounce, after falling to $16.78, matching the May 10 session low. Platinum fell to $925.00 an ounce, after falling to a four-month low at $923. Palladium was down 1.1 percent at $814.50 an ounce.

Commodities
1.Crude Oil
Oil slipped 1 percent on Monday as rising crude output on Libya and the United States countered OPEC-led production cuts aimed at clearing a supply glut. Global benchmark Brent crude for July settled down 53 cents to $51.52 a barrel, while U.S. crude for June dropped 49 cents, or 1 percent, to $48.84 a barrel. Volume was light, with about 336,000 U.S. front-month contracts changing hands, less than the daily average of 520,000 contracts.

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

U.S. Treasuries
1. U.S. bonds
U.S. Treasury debt prices dropped on Monday in generally thin volume, pressured by comments from Treasury Secretary Steven Mnuchin saying the government is looking into the issuance of ultra long-term bonds, or those with maturities beyond 30 years. The yield on U.S. 30-year bond rose to a three-week high, while that of 10-year notes touched session peaks after Mnuchin's comments.

2. Chinese bonds
China's market was closed for the Labor Day holiday.

Stock Market
1. U.S. Equities
Wall Street climbed on Monday, boosted by gains in Apple and other big tech stocks that more than offset weak economic data and pushed the Nasdaq Composite to another record high. Apple shares jumped 2 percent and set a record high, supporting the three major Wall Street indexes. The S&P 500 technology index, the best performing major group this year, gained 0.9 percent, with big tech names including Microsoft, Alphabet and Facebook hitting records. The S&P 500 gained 4.13 points, or 0.17 percent, to 2,388.33 and the Nasdaq Composite added 44.00 points, or 0.73 percent, to 6,091.60, a record closing high. The Dow Jones Industrial Average fell 27.05 points, or 0.13 percent, to 20,913.46. The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its lowest level since Feb 2007.

2. Hong Kong Equities
Hong Kong's market was closed for the Labor Day holiday.

3. China Equities
China's market was closed for the Labor Day holiday.