I. Yesterday's News
International News
1. China's forex reserves rose $23.931 billion to $3.08072 trillion at the end of July, climbing for six months in a row, central bank data showed on Monday. Analysts said weakness in the dollar helped push up the value of its holdings. Cross-border capital flow eased, but net outflow continued. In "special drawing rights" (SDR) currencies, China's reserve position stood at $2.188102 trillion in July, down 8.534 billion from the previous month. The value of China's gold reserves rose to $75.084 billion at end-July, rising 1.499 billion compared with the previous month. In terms of ounce, gold reserves were 59.24 million ounces at the end of July, remaining unchanged for the 10th consecutive month.

2. Tesla Inc said on Monday it would raise about $1.5 billion through its first-ever offering of junk bonds as the U.S. luxury electric car maker seeks fresh sources of cash to ramp up production of its new Model 3 sedan. The move to issue junk bonds represents a bet by Tesla Chief Executive Elon Musk that bond investors will be as hungry as stock investors to back the company on expectations that its Model 3 will be a hit. Tesla shares are up 67 percent this year, pushing the company's market value to about $60 billion. Shares of Tesla closed down 0.48 percent on Monday.

3. The Federal Reserve can leave interest rates where they are for now because inflation is not likely to rise much even if the U.S. job market continues to improve, St. Louis Fed President James Bullard said on Monday. Bullard's comments are largely in line with those he has been making for over a year. Minneapolis Fed President Neel Kashkari said U.S. economy is doing well, saying when employers are desperate for workers they will hike wages. The greenback reacted little to comments from the two policymakers.

4. Rating company Fitch revised up its 2017 and 2018 world GDP growth forecasts to 3.0 percent (from 2.9 percent in June) and 3.2 percent (from 3.1 percent), respectively. "Spill-overs from the rebound in emerging market demand are reflected in the fastest growth in world trade since 2010," Fitch added. Fitch explained that the revisions are led by better-than-anticipated recovery in emerging markets, especially in China.

5. China's preliminary current account surplus in the first half of this year was $71.2 billion and its non-reserve financial account surplus was $15.6 billion, showing increase in reserve asset, according to data published by the State Administration of Foreign Exchange (SAFE).  The capital and financial account deficit was $13.6 billion, and its capital account deficit was $100 million, with its reserve asset increasing $29 billion.

Domestic News
6. China's central bank unveiled reform plans to improve the financial sector's capabilities to serve the real economy and deepen financial reform, while guarding against financial risk. It said it would continue to implement a prudent and neutral monetary policy and provide a suitable monetary environment for the supply-side structural reform.

7. China plans to further tighten the screws on overseas acquisitions by Chinese companies and borrowing to fund those transactions, and has started closely scrutinizing the commercial aspects of the deals, three people familiar with the move said. The National Development and Reform Commission (NDRC), and the Ministry of Commerce (MOFCOM) are now reviewing deal agreements in minute detail, said the people.

8. Foreign Ministry Spokesperson Geng Shuang said, “At present, the situation on the Korean Peninsula remains complex and sensitive. China calls on relevant countries to remain restrained and make positive efforts to ease the tensions and properly resolve the Korean Peninsula issue. China has always maintained that the Korean Peninsula issue should be settled through dialogue and negotiation.”

9. China will soon launch a new round of central environmental inspections covering eight provincial-level areas, according to an official statement Monday. A total of eight inspection teams will start month-long on-site investigations into local government work, including Jilin, Zhejiang, Shandong, Hainan, Sichuan, Tibet, Qinghai, and Xinjiang provinces, the Ministry of Environmental Protection (MEP) said.

10. Risks in Hong Kong's property market are now “very high,” according to the city's financial secretary Paul Chan Mo-po, who says local households could find themselves over-leveraged as interest rates rise.

II. Market Overview
FX
1. Global Market
The U.S. dollar eased slightly on Monday, but clung to most of its gains following Friday's robust U.S. jobs report, as investors await inflation data this week that may signal a turnaround in the currency's weakness this year. The dollar index, which tracks the greenback against six major rival currencies, was down 0.1 percent to 93.449. The greenback gained against the New Zealand dollar, the Canadian dollar and the Australian dollar on Monday. Meanwhile, the euro shrugged off an unexpected fall in German industrial production in June and was up 0.19 percent against the dollar to $1.179. The British pound slipped to a 10-month low against the euro, as investors bet the Bank of England would keep interest rates at record lows for the coming months, while the European Central Bank moves towards tightening.

2. Home Market
China's yuan dipped against the dollar in the morning session on Monday, with the midpoint rates falling after sharp gains in the dollar last Friday. Investors are watching whether this round of rally could sustain. Yuan is expected to be kept in a tight range under the guidance of the dollar index and midpoint rates.

Precious Metals
Gold prices were little changed on Monday, failing to gain support from a weaker dollar as investors digested sharp losses in the previous session and worried about further U.S. rate hikes. Spot gold ended at $1,257.31 an ounce. U.S. gold futures for December delivery settled up 0.01 percent at $1,264.70.

Commodities
1.Crude Oil
Oil prices dipped on Monday as a rebound in production from Libya's largest oil field prompted selling, and investors worried about higher output from OPEC and the United States. Global benchmark Brent crude futures ended the session down 5 cents, or 0.10 percent, at $52.37 a barrel after trading as low as $51.37 a barrel. U.S. crude futures settled 19 cents, or 0.4 percent lower at $49.39 per barrel, after seeing a low of $48.54 a barrel.

2.Base Metals
Copper prices hit two-year peaks on Monday as soaring steel and iron ore prices in China brightened the outlook for growth and industrial demand in the world's largest metals consumer. London Metal Exchange copper ended up 0.7 percent at $6,414 a tonne, having earlier jumped to $6,447.50, its highest since May 2015. Aluminium closed up 2.8 percent at $1,964 a tonne, its highest since late May.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury yields slipped on Monday after a stronger-than-expected U.S. non-farm payrolls report the previous session, with no major market drivers ahead of a slew of government bond and corporate supply this week. The U.S. yield curve steepened, with the spread between the five-year and 30-year rising to 102.5 basis points. In late trading, U.S. 10-year yields slipped to 2.258 percent , from 2.269 percent late Friday. U.S. 30-year bonds yielded 2.835 percent. U.S. two-year yields were at 1.354 percent.

2. Chinese bonds
China's inter-bank cash bonds edged up in the morning session on Monday, with the T-bond futures softening. Surging commodity prices weighed on the bond market, igniting concerns over rising inflation. Lackluster sentiment pushed investors to the sidelines.

Stock Market
1. U.S. Equities
The Dow edged up to its ninth record closing high in a row while the S&P ended slightly higher on Monday, with consumer and technology sector gains offsetting losses in energy. The Dow Jones Industrial Average rose 25.61 points, or 0.12 percent, to close at 22,118.42. The S&P 500 climbed 4.08 points, or 0.16 percent, to 2,480.91 and the Nasdaq Composite added 32.21 points, or 0.51 percent, to end at 6,383.77.

2. Hong Kong Equities
Hong Kong stocks posted modest gains on Monday, buoyed by strength in technology firms as well as Chinese resource and financial shares. The Hang Seng index ended up 0.5 percent at 27,690.36 points, while the China Enterprises Index gained 0.5 percent to 11,054.41.

3. China Equities
China's shares closed up on Monday, snapping a three-day decline, led by cyclical names and consumers on regulations on environmental protection and capacity cut. Facing heavy resistance at 3,300, a breakthrough can be hardly expected. The benchmark Shanghai Composite Index ended at 3,279.46, up 17.38 points or 0.53 percent. The turnover of Shanghai A shares shrank to 231.7 billion yuan from Friday's 285.4 billion yuan.