I. Yesterday’s News
International News

1. U.S. Secretary of State Mike Pompeo announced $113 million in new technology, energy and infrastructure initiatives in emerging Asia on Monday, at a time when China is pouring billions of dollars in investments into the region. In a policy speech delivered amid increased U.S. trade frictions with China and other Asian countries, Pompeo sought to define the economic aspect of President Donald Trump's "Indo-Pacific" strategy, which aims to cast the United States as a trustworthy partner in the region. Pompeo said he will visit Malaysia, Singapore and Indonesia this week, where he planned to announce new security assistance.

2. U.S. President Donald Trump said on Monday he would be willing to meet Iran's leader without preconditions to discuss how to improve ties after he pulled the United States out of the 2015 Iran nuclear deal, saying, "If they want to meet, we'll meet." The White House clarified that Trump's potential willingness to meet with his Iranian counterpart does not change his administration's intent to ratchet up sanctions and rhetoric against Tehran with the stated goal of "seeking changes in the Iranian government's behavior."

3. Japan's retail sales climbed more than expected in June due to increased spending on fuel, appliances and cosmetics, in a positive sign that households are growing more confident in the economy. The 1.8-percent annual increase in retail sales in June was more than the median estimate for a 1.6-percent annual gain and follows a 0.6-percent annual increase in May. The results for June showed retail sales have risen for eight consecutive months. On a seasonally-adjusted basis, retail sales also gained 1.5 percent in June versus a 1.7-percent decline in the previous month, data from the trade ministry showed on Monday.

4. India has imposed a 25 percent safeguard duty on solar cell imports for a year to July 29, 2019, a government order published on Monday said, as the country tries to protect the domestic solar industry. The safeguard duty will not be imposed on imports from developing countries except China and Malaysia, according to the notification. India imports over 90 percent of its solar equipment from China. The safeguard duty on imports would be applicable for two years. It would be reduced in the second year to 20 percent for six months, and would be charged at 15 percent for the next six months, the order said.

5. Bank of England governor Mark Carney said the pursuit of the "low road" of protectionism would cost jobs, growth and stability while the liberalisation of global trade in services could lead to a more inclusive system. In an interview with Bloomberg, Mr Carney said the bank's research had shown that reducing restrictions on services trade could reduce excess global imbalances by close to one half. Asked about Brexit, he said the bank could have a disorderly Brexit stress test within nine months.

Domestic News

6. China's door of dialogue with the United States on bilateral trade frictions remains open, State Councillor Wang Yi said on Monday, reiterating that Beijing does not want a trade war.

7. China’s foreign direct investment in 55 countries covered by the Belt and Road trade initiative decreased 15 percent year-on-year in the first half of the year, according to official figures released on Monday. The value of investment stood at US$7.68bn, accounting for 12.3 percent of China’s total outbound direct investment from January to June, China’s Ministry of Commerce said. Singapore, Laos, Malaysia, Vietnam, Pakistan, Indonesia, Thailand and Cambodia were the main recipients of Chinese Belt and Road investment, according to the ministry.

8. Chinese investors signed agreements to build a $10 billion metallurgical complex in South Africa during President Xi Jinping's state visit this week and hope to start construction next year, an executive involved in the project and a provincial official told Reuters.

9. China will punish officials at government-run firms held responsible for the loss of state-owned assets, the state asset regulator said on Monday. In detailed "implementation measures" published on Monday, the State-Owned Asset Supervision and Administration Commission (SASAC) said it would take action against officials who fail to perform their duties and whose actions result in asset losses or "other serious adverse consequences".

II. Market Overview
FX
1. Global Market

The U.S. dollar was slightly lower against the Japanese yen on Monday, as investors braced for the possibility that the Bank of Japan will announce changes to its monetary easing policy on Tuesday at the conclusion of a two-day meeting. The dollar was 0.05 percent lower against the yen at 110.98 yen. The euro rose 0.46 percent against the dollar, as it recovered from its worst weekly performance against the greenback in six weeks. The U.S. dollar index, which measures the greenback against a basket of six currencies, was down 0.38 percent at 94.316, ahead of economic data and central bank monetary policy meetings this week.

2. Home Market

China's yuan hit its latest 13-month low to 6.84 per dollar during the session after the central bank cut 190 bps in midpoint rate. Dollar buying demand pressured on yuan and kept midpoint rate in check. Yuan is expected to keep pulling back in the near term. Investors shall closely watch whether regulator would intervene to ease the losses.

Precious Metals

Gold steadied on Monday ahead of a meeting of the U.S. Federal Reserve this week that could yield clues to the future direction of U.S. interest rates and the dollar, key factors for precious metals prices. Spot gold was steady at $1,221.3 per ounce. U.S. gold futures for August delivery settled down $1.70, or 0.1 percent, at $1,221.30 per ounce.

Commodities
1.Crude Oil

Oil prices rose on Monday, with U.S. crude futures jumping more than 2 percent, as traders continued to focus on supply disruptions and a possible hit to crude output from U.S. sanctions on Iran. October Brent crude futures, the most actively traded contract, settled at $75.55 a barrel, up 79 cents. The September Brent contract, which expires on Tuesday, settled at $74.97, up 68 cents, or 0.9 percent. U.S. West Texas Intermediate crude futures (WTI) rose $1.44, or 2.1 percent, to settle at $70.13 a barrel.

2.Base Metals

Copper prices fell on Monday as investors shrugged off a potential strike at the world's largest copper mine and focused instead on economic data this week expected to show slowing growth in top metals consumer China. Benchmark copper on the London Metal Exchange (LME) closed down 0.8 percent at $6,250 a tonne. Benchmark LME zinc finished down 1.5 percent at $2,557 a tonne. Aluminium ended up 1.1 percent at $2,094 a tonne.

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

U.S. Treasury bond yields on Monday afternoon were back to where they started the day as investors traded cautiously in the lead up to Tuesday's interest-rate policy decision from the Bank of Japan. The benchmark 10-year government bond hit 2.99 percent on Monday morning, its highest since June 13, before falling to 2.98 percent in the afternoon, less than two basis points above its open. The two-year note yield was little changed from Friday at 2.67 percent. The 30-year bond yield was up over a basis point from Friday to 3.11 percent.

2. Chinese bonds

Liquidity in China’s interbank market remained eased after the central bank suspended repo operations, buoying shorter-dated bonds. While, yields of longer-dated bonds, including that of the 10-year bonds, steepened after sharp losses last week.

Stock Market
1. U.S. Equities

A broad sell-off of technology stocks pushed the three major U.S. stock indexes lower on Monday, with the Nasdaq Composite posting its third consecutive loss of more than 1 percent for the first time in three years just days after hitting a record high. The Dow Jones Industrial Average fell 144.23 points, or 0.57 percent, to 25,306.83, the S&P 500 lost 16.22 points, or 0.58 percent, to 2,802.6, and the Nasdaq Composite dropped 107.42 points, or 1.39 percent, to 7,630.00.

2. Hong Kong Equities

Hong Kong's Hang Seng index closed weaker on Monday, pulled down by a slump in healthcare shares amid an ongoing vaccine scandal, but China's H-shares index ended flat. The Hang Seng index ended down 71.15 points, or 0.25 percent, at 28,733.13. The Hang Seng China Enterprises index was nearly unchanged at 11,046.32. Healthcare firms followed their A-share counterparts lower, with a sub-index of the Hang Seng following healthcare firms ended down 2.3 percent as an ongoing vaccine scandal drove investors to sell.

3. China Equities

China stocks ended down for the fourth consecutive day on Monday, reversing earlier gains led by healthcare sector and the firms facing delisting risk. Turnover was lackluster during the decline. The Shanghai Composite Index is expected to fall further in the near term, with support at 2,850.