I. Yesterday's News
International News
1. The U.S. dollar fell to a more than two-week low against the Japanese yen on Friday as investors doubted the likelihood of swift tax reform and a quick spending boost from U.S. President Donald Trump's administration. The gain of the dollar index was small. U.S. benchmark 10-year Treasury note yields dropped to five-week lows on Friday, pressured by declines in Europe amid persistent political uncertainty and a soft batch of U.S. Data. Wall Street edged higher on Friday, with the Dow extending its streak of record-setting gains to 11 days, supported by increases in safety plays.

2. The Commerce Department said new home sales increased 3.7 percent to a seasonally adjusted annual rate of 555,000 units last month. Economists had forecast single-family home sales surging 6.3 percent to a 570,000-unit rate. In a separate report on Friday, the University of Michigan said its consumer sentiment index fell to a reading of 96.3 this month from 98.5 in January. The index had surged in the prior three months after Donald Trump's presidential election victory.

3. Canada's annual inflation rose 0.9 percent month-on-month and 2.1 percent year-on-year in January, Statistics Canada said on Friday. The core Consumer Prices rose 0.5 percent month-on-month and 1.7 percent year-on-year respectively. Figures from the British Bankers' Association showed its members gave the green light to 44,657 mortgages in January, up from 43,581 in December. The net mortgage lending reached ￡1.883 billion in January, up from ￡2.013 billion in December.

4. Moody's affirmed Germany's AAA government bond and long-term issuer ratings. The outlook remains stable. Looking ahead, Moody's expects a slight deceleration in Germany's real GDP growth to 1.6 percent in 2017. Credit rating agency Standard and Poor's affirmed Hungary's rating at 'BBB-/A-3', while maintaining its outlook on the country's debt as "stable". Fitch Ratings has affirmed Greece's Long-term foreign- and local currency Issuer Default Ratings (IDRs) at ‘CCC'.

5. Standard Chartered swung back to a full-year annual profit for 2016, the emerging markets-focused lender reported on Friday, as it pared back costs from chief executive Bill Winters's restructuring program. StanChart made a statutory pretax profit of $409 million for 2016. The result was better than the average analysts' estimate for a pretax profit of $366 million according to Thomson Reuters data. Record Audi and Porsche sales helped Volkswagen swing to a record underlying profit in 2016, although a bigger than expected charge from the diesel emissions scandal meant it missed estimates for its operating profit. VW forecast an underlying operating margin of between 6 and 7 percent for 2017, compared with the 6.7 percent it achieved last year. The growth of operating revenue is expected to pick up to 4 percent.

Domestic News
6. China Foreign Exchange Trade System (CFETS) announced on Friday to launch interbank Forex Lending in Japanese yen and Australian dollar, and support negative interest rates for all listed currencies. The benchmark interest-bearing tenure for yen and Australian dollar is 360 days.

7. Guo Shuqing, who is stepping down as governor of Shandong province to take control of China's banking regulator, returns to Beijing at a decisive moment for the country's financial system reform. The immediate challenge for the new chairman of the China Banking Regulatory Commission (CRBC) is formidable - Guo, highly regarded as one of China's most experienced financial services professionals, must vigorously address troubled lending in the country's 230 trillion yuan banking sector and implement tougher measures to control risks and guarantee healthy development .

8. At the 26th session of the Standing Committee of the 12th National People's Congress (NPC) on Friday, He Lifeng was appointed director of the National Development and Reform Commission, Zhang Jun was named Minister of Justice,hong Shan was appointed Commerce Minister. Huang Qifan, Zhu Xiaodan, Yang Xiong, Liu Kun were appointed vice chairman of the National People's Congress (NPC) Financial and Economic Affairs Committee.

9. President Donald Trump declared China the "grand champions" of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing's foreign exchange practices. In an exclusive interview with Reuters, Trump said he has not "held back" in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.

10. China's State Council will further ease access restrictions on private investment, encouraging investment funds dominated by private capital and operating under market mechanisms, according to a statement released after a State Council executive meeting, chaired by Premier Li Keqiang. There will be more financing channels in the equity and bond markets and collateral financing, enabling companies to use their intellectual property rights and rights to earnings as collateral to secure financing.

11. Chinese leaders pledged monetary policy would be "prudent and neutral" in 2017. Ma Jun, chief economist at the People's Bank of China, said that policy would "prevent rapid rises in leverage ratios and avoid asset bubbles, under the premise of maintaining reasonable economic growth and basically stable inflation".

12. China for the first time became Germany's most important trading partner in 2016, overtaking the United States, which fell back to third place behind France, data showed on Friday.

II. Market Overview
FX
1. Global Market
The U.S. dollar fell to a more than two-week low against the Japanese yen on Friday as investors doubted the likelihood of swift tax reform and a quick spending boost from U.S. President Donald Trump's administration. The dollar fell as much as 0.6 percent against the safe-haven yen to 111.95 yen. Its first dip below 112 yen since Feb. 9 put the greenback on track for its second straight weekly loss against the Japanese currency, of about 0.8 percent. The euro slipped 0.2 percent against the dollar in afternoon trading to a session low of $1.0558. That put it on course for a 0.5 percent decline since Friday, for the third straight weekly slide. The dollar index, which measures the greenback against a basket of six major currencies, was up only slightly at 101.110.

2. Home Market
China's yuan firmed against the U.S. dollar on Friday, crossing over the key mark of 6.87 during one point, with the central parity rates rising for the second straight day. Amid balanced FX buying and settlement, market anticipation diverged on uncertainty over the dollar index. A two-way sharp volatility is expected to sustain with thinning trading volume and no signs of intervention from regulator.

Precious Metals
Gold reached its highest in 3-1/2 months on Friday as the dollar fell to a one-week low after the new U.S. Treasury chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year. Spot gold was up 0.6 percent at $1,256.75 an ounce, having touched its highest since Nov. 11 at $1,260.10 earlier, zeroing in on the 200-day moving average. It was on track to finish the week higher for the fourth straight week. U.S. gold futures settled up 0.55 percent at $1,258.30.

Commodities
1.Crude Oil
Oil prices fell about 1 percent on Friday as worries about rising U.S. supplies outweighed OPEC pledges to boost compliance with output curbs. Brent crude oil settled down 59 cents, or 1.04 percent, at $55.99 a barrel, while U.S. West Texas Intermediate ended the session 46 cents lower at $53.99 a barrel. However, both benchmarks notched a weekly gain of about 1.1 percent.

2.Base Metals
Copper clawed back some of the previous session's hefty losses on Friday as supply disruptions in Chile and Indonesia lent support, but still posted a second straight weekly drop as concerns over the demand outlook weighed. Three-month copper on the London Metal Exchange closed at $5,928 a tonne, up 1.2 percent from the previous day but still half a percent lower on the week.

U.S. Treasuries
1. U.S. bonds
U.S. benchmark 10-year Treasury note yields dropped to five-week lows on Friday, pressured by declines in Europe amid persistent political uncertainty and a soft batch of U.S. data that suggested a more mixed outlook for the world's largest economy. In afternoon trading, U.S. 10-year notes were up 18/32 in price to yield 2.322 percent, compared with 2.388 percent late Thursday. Yields fell as low as 2.313 percent, the lowest since Jan. 17. U.S. 30-year bond prices also rose, up more than 1 point, yielding 2.958 percent, down from Thursday's 3.023 percent. U.S. 30-year yields also touched a two-week low of 2.955 percent. U.S. two-year, five-year and seven-year notes also declined.

2. Chinese bonds
China's interbank money rates reversed losses into the positive territory. Government bonds pared gains at the noon following a 0.3 percent early growth.

Stock Market
1. U.S. Equities
Wall Street edged higher on Friday, with the Dow extending its streak of record-setting gains to 11 days, as increases in utilities and other safety plays outweighed declines in financials. The Dow Jones Industrial Average rose 11.44 points, or 0.05 percent, to end at 20,821.76, the S&P 500 gained 3.53 points, or 0.15 percent, to 2,367.34 and the Nasdaq Composite added 9.80 points, or 0.17 percent, to 5,845.31.

2. Hong Kong Equities
Hong Kong stocks fell for a second day on Friday, as resource firms were hit by weak commodities markets in China and a sharp drop in money inflows from Shanghai. The benchmark Hang Seng index dropped 0.6 percent, to 23,965.70, while the Hong Kong China Enterprises Index lost 1.0 percent, to 10,418.66.

3. China Equities
China stocks were slightly up on Friday, sustaining rangebound. Cyclical names led the decline, while medium and small telecom, media names saw a strong increase. Defense sector buoyed major index to regain ground late in the session. The Shanghai Composite Index is expected to keep going sideways due to heavy locked-up stocks at 3,300. While medium and small caps are expected to rally.