I. Yesterday’s News
International News

1. The United States will begin collecting 25 percent tariffs on another $16 billion in Chinese goods on Aug. 23, the U.S. Trade Representative's office said on Tuesday as it published a final tariff list targeting 279 imported product lines. The latest $16 billion list will hit semiconductors from China, even though many of the basic chips in these products originate from the United States, Taiwan or South Korea. The 25 percent tariffs also will apply to a broad range of Chinese electronics, plastics, chemicals and railway equipment.

2. Companies doing business with Iran will be barred from the United States, President Donald Trump said on Tuesday, as new U.S. sanctions took effect despite pleas from Washington's allies. Iran dismissed a last-minute offer from the Trump administration for talks, saying it could not negotiate while Washington had reneged on a 2015 deal to lift sanctions in return for curbs on Iran's nuclear programme. European countries, hoping to persuade Tehran to continue to respect the deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out. But that has proven difficult: European companies have quit Iran, arguing that they cannot risk their U.S. business.

3. Chief Executive Elon Musk said on Tuesday he is considering taking Tesla Inc private in what would be the largest deal of its type, moving the electric car maker out of the glare of Wall Street. "Am considering taking Tesla private at $420. Funding secured," Musk said on Twitter. At $420 per share, a deal would be worth $72 billion overall. Musk did not disclose the source of the funding, although he said "investor support is confirmed." Tesla shares closed up 11 percent at $379.57, slightly below their all-time high.

4. National security adviser John Bolton said Tuesday that North Korea has not made progress toward denuclearization, in a dismal acknowledgment that comes nearly two months after President Donald Trump held a historic summit with North Korean leader Kim Jong Un. Bolton revealed in an interview on Fox News Channel that Pompeo plans to make another visit to North Korea to meet with Kim.

5. Australia's central bank has marked two whole years with no move in interest rates, the longest policy pause in its modern history, as optimism on the economy is tempered by miserly wage growth and muted inflation. The Reserve Bank of Australia (RBA) ended its August policy meeting on Tuesday with rates held at a record low of 1.50 percent, and showed every intention of keeping them there.

Domestic News

6. The State Council has decided to cancel 11 more administrative approval items, including the setup, change and dismissal of joint ventures. According to a notice on the website of the Ministry of Finance, another 6 administrative approval items will be submitted to the Standing Committee of the National People's Congress for revisions.

7. China'sHNA Group Co Ltd is in advanced talks to sell a minority stake in its aircraft-leasing business Avolon Holdings Ltd to Japan'sOrix Corp in a deal that could be worth more than $2 billion. Orix is looking to buy a 25 percent to 30 percent stake in Avolon, Bloomberg said, citing a source, adding that there were also other suitors for the Avolon stake.

8. Alibaba Group plans to merge its food delivery units and raise funds for the combined business. The Alibaba units to be merged include food delivery platform Ele.me and food and lifestyle services firm Koubei, looking to raise between $3 billion and $5 billion for the combined entity, said one source. The entity could be valued at up to $25 billion, said another. Softbank is said to lead $3 billion-plus round in Alibaba Ele.Me.

II. Market Overview
FX
1. Global Market

The U.S. dollar weakened against the euro on Tuesday as the Chinese yuan showed more stability, after the greenback reached an almost five-week high against the single currency on Monday. The yuan has strengthened to 6.8284 from 6.9122 on Friday. The dollar index was down 0.10 percent at 95.264. The euro gained 0.24 percent against the greenback to $1.1581. It has some technical support at around $1.15.

2. Home Market

China's yuan fell against the greenback in the morning session, while the midpoint rate rose over 80 bps, off an over 14-month low. Institutional investors lowered their will to sell yuan due to the central bank’s move to stabilize the currency. But the dollar’s strength and Sino-U.S. trade friction will keep yuan in check.

Precious Metals

Gold climbed nearly 1 percent on Tuesday, having drifted near $1,200 an ounce this week, as the U.S. dollar fell versus China's yuan against a backdrop of U.S.-China trade tensions. Spot gold gained at $1,210.64 per ounce, while U.S. gold futures for December delivery settled up 60 cents, or 0.1 percent, at $1,218.30.

Commodities
1.Crude Oil

Oil prices rose on Tuesday after U.S. sanctions on Iranian goods went into effect, intensifying concerns that sanctions on Iranian oil, expected in November, could cause supply shortages. U.S. sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on Nov. 4. Brent futures rose 90 cents, or 1.2 percent, to settle at $74.65 a barrel, after hitting a session high of $74.90. U.S. West Texas Intermediate (WTI) crude futures settled 16 cents, or 0.2 percent, higher at $69.17 a barrel, down from an earlier high of $69.83.

2.Base Metals

Base metals rose on Tuesday on short-covering amid optimism top consumer China will prop up its economy with stimulus measures and that the country's currency is stabilising. Three-month zinc on the London Metal Exchange closed 1.3 percent higher in final open outcry trading at $2,600 a tonne. LME copper gained 0.7 percent to finish at $6,175 a tonne.

U.S. Treasuries
1. U.S. Bonds

U.S. Treasury yields rose on Tuesday as investors scaled back their bond holdings on higher Wall Street stock prices and pressure to make room for $78 billion in coupon-bearing supply from this week's quarterly government refunding. The U.S. Treasury Department sold $34 billion in three-year notes, the largest auction for the debt maturity in eight years, to mediocre demand. On late Tuesday trading, the benchmark 10-year yield increased nearly 4 basis points to 2.975 percent.

2. Chinese bonds

Yields of major financial debts in China’s interbank mark fell slightly, while the Treasury bonds were little changed. A rebounding stock market hit safe-haven sentiment, weighing on the futures and spot market. But encouraging auction of CDB tier-1 bonds pulled down the cash yields of financial cash debts. T-bond futures also closed higher.

Stock Market
1. U.S. Equities

The S&P 500 inched nearer to a record high on Tuesday, lifted by Amazon, Alphabet and Microsoft, and by a strong second-quarter earnings season that fueled optimism about the U.S. economy's strength. The Dow Jones Industrial Average rose 0.5 percent to end the day at 25,628.91 points. The S&P 500 ended the session at 2,858.45, just short of its January record of 2,872.87. The Nasdaq Composite added 0.31 percent to 7,883.66.

2. Hong Kong Equities

Hong Kong's main Hang Seng index ended firmer on Tuesday, led by gains in property stocks, after developer Country Garden said it expected upbeat first-half results. The Hang Seng index ended up 429.32 points or 1.54 percent at 28,248.88. The Hang Seng China Enterprises index closed 1.53 percent higher to 10,866.10.

3. China Equities

China's Shanghai stock market surged 74.21 points to 2,779.37, up 2.74 percent, the largest one-day rise since May 31 2016, when a 3.34 percent increase was recorded. It fell to 2,696.039 earlier in the session, testing again the support of 2,691.021 hit on July 6. The turnover of Shanghai A shares rose to 147.1 billion yuan from 132.8 billion yuan.