I. Yesterday’s News
International News

1. U.S. job growth increased at a strong clip in November, painting a portrait of a healthy economy that analysts say does not require the kind of fiscal stimulus that President Donald Trump is proposing, even though wage gains remain moderate. Nonfarm payrolls rose by 228,000 jobs last month amid broad gains in hiring as the distortions from the recent hurricanes faded, Labor Department data showed on Friday. The government revised data for October to show the economy adding 244,000 jobs instead of the previously reported 261,000 positions. The unemployment rate was unchanged at a 17-year low of 4.1 percent amid a rise in the labor force. Average hourly earnings rose five cents or 0.2 percent in November. That lifted the annual increase in wages to 2.5 percent from 2.3 percent in October. Workers also put in more hours last month. The dollar was trading higher against a basket of currencies, while prices for U.S. Treasuries fell. Stocks on Wall Street rose. Fed funds futures show investors see a 90 percent chance the U.S. central bank raises overnight interest rates to 1.25-1.50 percent at its Dec. 12-13 meeting and a 10 percent chance it raises them to 1.50-1.75 percent, according to CME Group's Fed Watch tool. The metric shows a zero percent chance the Fed holds at the current rate of 1.00-1.25 percent.

2. The University of Michigan's index of consumer attitudes fell to 96.8 in December, the opposite of a rise to 99 which economists surveyed by Reuters expected. The index hit 98.5 in November. Wholesale inventories declined 0.5 percent in October, the U.S. Commerce Department reported on Friday. Economists polled by Reuters expected the measure to fall 0.4 percent. Canadian housing starts rose to 252,200 in November from October's 222,700. There was no growth in industrial production in October alone, the Office for National Statistics said. Separate figures showed Britain's goods trade deficit widened in October to 10.781 billion pounds ($14.5 billion) from September's 10.5 billion pounds.

3. Britain's Brexit divorce bill of between 35 and 39 billion pounds represents a fair settlement, a spokesman for Prime Minister Theresa May said on Friday. EU Brexit chief Michel Barnier says Britain's withdrawal agreement must be ready by October 2018.

4. U.S. President Donald Trump on Friday signed legislation to fund the federal government for two weeks, giving congressional negotiators more time to work out budget priorities through next September and other thorny policy matters.

Domestic News

5. China's exports and imports showed surprising strength in November, underpinned by a recovering global economy and resilient domestic demand. We expect exports to continue to perform well in December on the back of strong global demand. However, the strength of imports can hardly be sustained given the high base. The recovered growth in export is consistent with the month-on-month growth in the new export orders of official manufacturing PMI amid the strong growth of global economy, underpinning industrial production in the fourth quarter. The strength in import was lifted by strong export and rising commodity prices including natural gas crude, etc..

6. China has uncovered irregular local government debts worth of over 6.432 billion yuan, authorities said. Five local governments in Jiangxi, Shaanxi, Gansu, Hunan and Hainan provinces had raised the sum of debts through irregularly offering commitment letters, according to an audit report in the third quarter by the National Audit Office (NAO). The audit findings also showed that ten cities and counties in Yunnan, Hunan and Jilin provinces as well as Chongqing Municipality had inflated their fiscal revenues by a total of 1.549 billion yuan.

7. The country's grain output stood at about 617.9 million tonnes in 2017, up by 1.66 million tonnes, or 0.3 percent, compared with last year, according to the National Bureau of Statistics (NBS).

8. A Chinese official from the National Development and Reform Commission (NDRC) on Thursday said that China and Pakistan are staying in contact with each other on the Diamer-Bhasha Dam project, and that the project is not included in the list of energy projects under the China-Pakistan Economic Corridor after Pakistani media outlets reported that "Chinese conditions were about taking ownership of the project, operations and maintenance costs and securitization of the Diamer-Bhasha project by pledging another operational dam."

9. Two American B-1B heavy bombers joined large-scale combat drills over South Korea on Thursday amid warnings from North Korea that the exercises and U.S. threats have made the outbreak of war "an established fact". "We hope all relevant parties can maintain calm and restraint and take steps to alleviate tensions and not provoke each other," Chinese Foreign Ministry spokesman Geng Shuang said in a statement.

10. China central bank governor Zhou Xiaochuan has said keeping prices stable and controlling systematic risks in the financial sector are two core targets for the bank. The People's Bank of China would maintain efforts on deleveraging as debt levels in the economy declined, while following a prudent and neutral monetary policy, Zhou Xiaochuan said in an article seen on Thursday.

11. Ten Chinese banks have raised objections to the central bank's recent move to tighten rules on the asset management sector, two sources with knowledge of the matter said. Senior executives from the joint-stock banks said during a closed-door meeting in Shanghai last week that the rules would have a big impact on financial markets and could even "trigger systemic financial risks", according to the sources.

II. Market Overview
FX
1. Global Market

The dollar rose against the euro and yen in choppy trading on Friday after a report showed the U.S. economy created more jobs than expected last month, but gains were capped by wages data that analysts said were disappointing. Following the data, the dollar pared gains against the yen but was still higher on the day at 113.52 yen, up 0.4 percent. The euro reduced losses versus the dollar and was last flat on the day at $1.1767. The dollar index was up 0.1 percent at 93.899.

2. Home Market

China's yuan fell against the U.S. dollar in the morning session on Friday, while the official midpoint rates lowered for the tenth consecutive month. The surprisingly upbeat November trade data had a limited impact on the forex market. A firmer dollar index continued to weigh on yuan, which is expected to remain consolidating in the near term.

Precious Metals

Gold prices hovered above a four-month low on Friday and were on track for their biggest weekly fall since May after progress on U.S. tax reform fueled optimism about the U.S. economy and boosted the dollar. Spot gold was up 0.1 percent at $1,247.81 an ounce, near Thursday's low of $1,243.71, the weakest since July 26. It has fallen 2.6 percent so far this week, its third consecutive weekly fall and the biggest since early May. U.S. gold futures settled down 0.4 percent at $1,248.40.

Commodities
1.Crude Oil

Oil prices rose almost 2 percent on Friday, helped by rising Chinese crude demand and threats of a strike in Africa's largest oil exporter. Brent crude settled up $1.20 or 1.9 percent at $63.40 a barrel. U.S. West Texas Intermediate (WTI) crude settled up $57.36 a barrel, up 67 cents or 1.2 percent. But U.S. prices fell 1.7 percent on the week and Brent prices fell 0.5 percent.

2.Base Metals

Copper prices rose on Friday after data showing a jump in Chinese imports of the metal fuelled expectations of stronger demand from the top consumer, but gains were capped by a rising dollar. Benchmark copper on the London Metal Exchange ended up 0.1 percent at $6,571 a tonne from an earlier session high at $6,674.50.

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

U.S. Treasury yields were little changed on Friday after seesawing following the release of a U.S. jobs report that showed the economy added 228,000 jobs last month but average hourly earnings failed to meet expectations. Benchmark 10-year notes were down 1/32 in price to yield 2.38 percent. The 2-year note was little changed in price, yielding 1.80 percent.

2. Chinese bonds

Liquidity in China’s inter-bank market remained loose after the central bank withdrew 10 billion yuan from the open market. But cross-year liquidity remained tightened with three-month interbank deposit certificate rates approaching 5 percent.

Stock Market
1. U.S. Equities

U.S. stocks advanced on Friday, buoyed by a solid payrolls report for November that locked in expectations for an interest rate hike from the U.S. Federal Reserve next week and raised optimism about economic prospects in 2018. The Dow Jones Industrial Average rose 117.68 points, or 0.49 percent, to 24,329.16, the S&P 500 gained 14.52 points, or 0.55 percent, to 2,651.5 and the Nasdaq Composite added 27.24 points, or 0.4 percent, to 6,840.08. For the week, the Dow rose 0.4 percent, the S&P advanced 0.35 percent and the Nasdaq fell 0.11 percent.

2. Hong Kong Equities

Hong Kong stocks rose the most in two weeks on Friday, aided by a sharp rebound in Tencent Holdings, and better-than-expected China November trade data. At close of trade, the Hang Seng index was up 336.66 points or 1.19 percent at 28,639.85. The Hang Seng China Enterprises index rose 1.25 percent to 11,289.57.

3. China Equities

Chinese stocks closed higher on Friday, snapping a four-day losing streak led by home appliances, food & beverage, telecom and electronic sectors, after better-than-expected import data eased concerns over economy in the near term. Major indexes are expected to consolidate repeatedly between 3,250 to 3,300.