I. Yesterday's News
International News
1. The Federal Reserve Bank of New York confirmed on Monday that William Dudley, among the most influential monetary policymakers throughout the financial crisis and its aftermath, expects to retire by mid-2018, raising another question over leadership at the U.S. central bank less than a week after President Donald Trump chose a new Fed chief. Dudley, 64, one of the central bank's strongest advocates of unprecedented monetary stimulus in the last decade and a steady hand on its delicate market operations, will step down before his term as president officially ends in January 2019. The New York Fed's board said its search committee had already begun its work, and aims to name a successor by the middle of next year.

2. U.S. President Donald Trump will step directly into the shadow of the North Korean nuclear standoff on Tuesday on a visit to South Korea in which his words alone could risk further inflaming tensions with North Korean leader Kim Jong Un. Arriving in South Korea on the second stop of a five-country trek, Trump will tour the main garrison for U.S. troops stationed in South Korea, the sprawling Camp Humphreys, which lies about 100 km from the border with reclusive North Korea. The White House says Trump's trip is intended to demonstrate U.S. resolve over his hard-line approach to the North Korean nuclear and missile threats, but many in the region fear that further bellicose presidential rhetoric could increase the potential for a devastating military conflict on the Korean peninsula.

3. A gunman massacred at least 26 worshipers and wounded 20 others at a white-steepled church in Texas yesterday, carrying out the latest in a series of mass shootings that have plagued the United States. The lone suspect, also wearing a ballistic vest and carrying a Ruger assault rifle, fired into the First Baptist Church in Sutherland Springs and kept shooting after he went inside. Sutherland Springs is in Wilson County. The victims ranged in age from 5 to 72 years old, law enforcement officials told a news conference. The suspect fled in his vehicle, was found dead near the border of neighbouring Guadalupe County.

4. Saudi Arabia's future king has tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including billionaire Alwaleed bin Talal who is one of the kingdom's most prominent businessmen. 11 princes, four ministers and tens of former ministers were detained, three senior officials told Reuters on Sunday. Analysts said the purge aimed to go beyond corruption and aimed to remove potential opposition to Prince Mohammed's ambitious reform agenda, which is widely popular with Saudi Arabia's burgeoning youth population but faces resistance from some of the more conservative old guard.

Domestic News
5. China's solid consumption in tourism, catering and entertainment during the National Day holiday is expected to drive non-food prices up, a Reuters survey said. In the meanwhile, CPI growth rebounded slightly, PPI growth dropped, prices remained stable with subdued inflation, while pollution and output control amid winter heating season will pull industrial output sharply down.

6. China to implement unified negative list on market access nationwide in 2018 by improve the negative list, and approval and supervision system, said Yi Gang, vice president of the People's Bank of China. Foreign investment relating to national security should undergo a security review based on relevant laws, according to Yi.

7. China's central bank governor Zhou Xiaochuan made a series of blunt warnings about financial risks in the world's second-largest economy in an article, explaining the supervision route guarding against systematic financial risks from a macro perspective. It is clear to build a “double-pillar” regulatory framework of monetary policy and macro-prudential policy under the management of the State Council Financial Stability and Development Committee, according to Zhou.

8. Moody's Investors Service says that broad shadow banking activity in China stopped growing during the six months between January and June 2017 (H1 2017) because of a fall the issuance of higher risk instruments, such as the banks' wealth management products, and non-bank financial institutions' asset management plans. And, for the first time since 2012, nominal GDP grew faster than shadow banking assets during H1 2017, resulting in such assets falling in China's GDP.

9. Yao Qian, director-general of the Institute of Digital Money at the PBOC, stressed that the development of digital economy needs digital finance and digital currency, quoting “as money has evolved from the barter system to its metallic and paper forms, it is now going digital.” But the legal construction of sovereign digital currency still has a long way to go, said Yao.

10. Finance Minister Xiao Jie recently wrote an article that described a road map to reform the current tax system into a "modern" style, saying China needs to coordinate the relationship between central and local government, to build a more standard and scientific budget system, and improve local tax system.

II. Market Overview
FX
1. Global Market
The dollar stumbled against a basket of currencies on Monday, giving up some recent gains, as uncertainties related to proposed U.S. tax revisions and the future composition of the Federal Open Market Committee discouraged traders from bidding the greenback higher. The dollar index, which tracks the greenback against six major currencies, was down 0.19 percent at 94.764. The index has risen nearly 3 percent since mid-September. The dollar was 0.31 percent lower against the Japanese yen, and the euro was down 0.03 percent against the greenback. Sterling rose 0.73 percent against the dollar, rebounding from a one-month low hit after the Bank of England's policy meeting.

2. Home Market
China's yuan pared losses against the U.S. dollar in the morning session on Monday with a lower official midpoint. Upbeat news including tax reform in U.S. is expected to push up the dollar index and pressure yuan to test the support of $6.66-6.68. U.S. President Donald Trump's visit to China this week will have an psychological impact on yuan's performance.

Precious Metals
Gold rose more than 1 percent on Monday, extending gains as geopolitical risks drove investors to safe-haven assets after the metal's third-straight weekly decline. Spot gold was up to $1,281.51 an ounce, while U.S. gold futures for December delivery settled up $12.40, or 1 percent, at $1,281.60 per ounce.

Commodities
1.Crude Oil
Oil prices rose 3.5 percent on Monday, hitting the highest since early July 2015, as Saudi Arabia's crown prince cemented his power with an anti-corruption crackdown, while the U.S. rig count fell and markets continued to tighten. Brent crude futures settled up $2.20, or 3.5 percent, to $64.27 per barrel. U.S. West Texas Intermediate (WTI) crude rose $1.71, or 3 percent, to $57.35 a barrel. Both benchmarks were at their highest since early July 2015.

2.Base Metals
Nickel and copper rose on Monday, boosted by expectations of healthy demand from the electric vehicle sector, a pollution crackdown in China and signs of solid global economic growth. London Metal Exchange nickel ended up 1.5 percent at $12,920 a tonne, having gained nearly 10 percent last week to hit a high above $13,000, its loftiest level since June 2015. Copper closed up 1.1 percent at $6,970, paring losses from the previous session. Copper prices have climbed 7 percent this quarter and are eyeing a sixth straight quarter of growth.

U.S. Treasuries
1. U.S. Bonds
The gap between U.S. short-dated and long-dated Treasury yields on Monday contracted to its tightest levels in a decade as sluggish domestic inflation underpinned demand for longer-maturity government bonds. The yield spread between two-year and 10-year Treasuries broke below 70 basis points, a level last seen in November 2007, Reuters data showed. The benchmark 10-year yield was down 2.5 basis points at 2.318 percent after hitting its lowest level in two weeks, while the two-year yield slipped nearly 1 basis point at 1.617 percent.

2. Chinese bonds
The benchmark cash bonds were little changed in China's interbank bond market as investors stayed on the sidelines due to lack of direction. Yields of 10-year Treasury bonds and CDB bonds hovered at highs. Liquidity remained loose at early-month, despite the central bank halted operations.

Stock Market
1. U.S. Equities
U.S. stocks climbed to record highs on Monday, helped by optimism about merger activity and as investors bet that a Republican plan to cut corporate taxes would bolster earnings. The Dow Jones Industrial Average inched up 9.23 points or 0.04 percent to end at 23,548.42, while the S&P 500 gained 3.29 points or 0.13 percent to 2,591.13. The Nasdaq Composite added 22.00 points or 0.33 percent to 6,786.44.

2. Hong Kong Equities
Hong Kong stocks pared sharp losses on Monday, as mainland investors sought bargains in blue chips such as Tencent Holdings and China Construction Bank. The benchmark Hang Seng index tumbled as much as 1.6 percent in the morning session, but recouped most of its losses by market close, ending at 28,596.80 points. The China Enterprises Index lost 0.7 percent, to 11,524.64 points, also recovering from its earlier tumble.

3. China Equities
The Shanghai Composite Index rebounded in a seesaw trade on Monday, lifted by food & beverage, home appliances, pharmaceutic sectors. On technical front, the downward momentum softened after major indexes pulled back to the 60-day moving average of 3,349, and is expected to keep trading within this range.