I. Yesterday’s News
International News

1. Leaders from the Group of Seven countries are highly unlikely to issue a final communique when a two-day summit in Canada ends on Saturday because of a lack of consensus among the group, who are deeply divided over trade issues. French President Emmanuel Macron and U.S. President Donald Trump had a brief “very cordial” discussion about trade and North Korea, a French official said on Friday. German Economy Minister Peter Altmaier called on Friday for Europe to remain unified in the face of rising trade tensions with the United States, saying it was unclear how a summit of the Group of Seven rich nations would end. British Prime Minister Theresa May on Friday warned both U.S. President Donald Trump and the European Union of the dangers of entering a tit-for-tat trade war over tariffs, urging both sides to instead focus on China’s excess steel production. U.S. President Donald Trump’s proposal to bring Russia back into the Group of Seven does not seem “coherent” in view of the latest sanctions imposed by the United States on Moscow, a French presidency source said on Friday.

2. North Korean leader Kim Jong-un is expected to fly into Singapore's Changi airport on Sunday ahead of a high-stakes summit with US President Donald Trump.

3. South Korea’s President Moon Jae-in will visit Russia from June 21 to June 23, with a high level meeting planned in Moscow for June 22, Interfax cited the Kremlin as saying on Friday.

4. The Commerce Department said on Friday wholesale inventories edged up 0.1 percent instead of being unchanged as it reported last month. Canada lost about 7,500 jobs with the unemployment rate holding steady at 5.8 percent, according to figures released by Statistics Canada.

5. MSCI’s index of world stocks rose to its highest since May 14, helped by Asian shares which climbed to an 11-week high overnight boosted by resilient economic fundamentals. MSCI's broadest index of Asia-Pacific shares outside Japan hit a 2-1/2-month high for two straight days. The pan-European banks index jumped 1.4 percent, as the euro and global bond yields rose on expected wind-down of stimulus from the European Central Bank.

6. Iran's OPEC governor Hossein Kazempour Ardebili said on Friday a U.S. request for Saudi Arabia to pump more oil so that it could cover a drop in Iranian exports was "crazy and astonishing" and said OPEC would not heed the appeal, setting the stage for a tough OPEC meeting this month.

7. Russia and China signed an agreement on Friday to establish a new investment fund that will initially hold 1.5 billion yuan (US$234 million) under management and support financial and industrial projects in Russia and China.

Domestic News

8. China's imports & exports logged a double-digit growth in May, beating analysts’ expectations, while trade surplus shrank. Analysts expected great uncertainty on exports amid mounting global trade friction, while import growth is likely to remain high under policy support. Trade surplus is expected to narrow down.

9. China’s No. 2 telecommunications equipment maker ZTE secured a lifeline from the Trump administration on Thursday after agreeing to pay a $1 billion fine and overhaul leadership in a deal that will lift a ban on its doing business with U.S. Suppliers. The agreement comes as U.S. President Donald Trump seeks trade concessions from China and negotiations continue to avoid a trade war between the world's two largest economies. U.S. senators said they plan legislation to roll back the agreement.

10. China’s crude oil imports dropped in May from the record-high in April, as some major refineries started planned maintenance and as China ordered some independent refiners to reduce operating rates this month ahead of a regional summit in the port city Qingdao in the eastern Shandong province.

11. China's unwrought aluminum and aluminum product exports rose to their highest in almost 3-1/2 years in May, as a favorable price arbitrage saw more shipments overseas despite U.S. tariffs, while steel exports were the most since July 2017.

12. China will impose temporary anti-dumping measures on Brazilian broiler chickens from June 9, the commerce ministry said on Friday, after finding in a preliminary ruling that its domestic industry has been substantially damaged by the imports. Local firms buying Brazilian chicken will be required to pay deposits ranging from 18.8 percent to 38.4 percent of the value of their shipments, the ministry said in a statement.

II. Market Overview
FX
1. Global Market

The dollar rose on Friday after a four-day losing streak, while the safe-haven yen gained as investors grew cautious over what was expected to be a contentious G7 meeting in Canada on Friday. In late trading, the dollar rose 0.2 percent against a basket of currencies to 93.56. But it fell 0.7 percent for the week, its steepest weekly fall in 10 weeks. Next week's expected hike in U.S. interest rates by the Federal Reserve, a European Central Bank policy meeting and a Brexit bill vote all pose risks for currency traders.

2. Home Market

China's yuan tumbled around 100 bps against the dollar in heavy volume in the morning session. The dollar shows sighs of stabilizing in the near term after hitting as low as 93.20, adding to the rising forex-buying since June to send yuan below 6.4 per dollar. But yuan is expected to test the resistance of 6.36-6.38 again in case of continued correction from the dollar index in the afternoon. 

Precious Metals

Gold firmed on Friday as a rise in risk aversion ahead of G7 talks this weekend lent support, but the yellow metal remained hemmed within its narrowest weekly range in over a decade as a recovery by the dollar capped gains. Expectations that the Federal Reserve will announce another U.S. interest rate hike next week also pressured gold. Spot gold inched up 0.1 percent to $1,298.11 per ounce, while U.S. gold futures for August delivery settled down 30 cents, or 0.02 percent, at $1,302.70 per ounce.

Commodities
Crude Oil

Oil prices fell on Friday as concerns about surging U.S. output and falling demand in China weighed on the contract and JP Morgan cut its price forecast. Brent crude futures settled down 86 cents, or 1.1 percent, at $76.46 a barrel. U.S. West Texas Intermediate (WTI) crude futures ended 21 cents lower at $65.74 a barrel. For the week, Brent fell 0.5 percent, while U.S. crude slipped 0.3 percent.

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

U.S. Treasury yields were marginally lower on Friday on light volume as traders awaited the outcome of the Group of Seven summit, fretting about growing trade tensions between the United States and its major allies and global economic growth. The yield on benchmark 10-year Treasury notes was 2.926 percent, down 0.3 basis point from late Thursday. The 10-year yield was on track to increase about 4 basis points this week.

2. Chinese bonds

The yields of the benchmark cash bonds, including the 10-year CDB bonds, fell around 2 bps in the morning session, while Treasury bonds also rebounded. The bond market is still subject to consolidation amid ample liquidity, as institutional investors were awaiting more economic data, and how China will deal with the Federal Reserve’s interest rate hike.

Stock Market
1. U.S. Equities

U.S. stock indexes closed higher on Friday as investors shrugged off concerns about global trade tensions but trading volume was relatively light ahead of a busy week of central bank meetings. The Dow Jones Industrial Average rose 75.12 points, or 0.3 percent, to 25,316.53, the S&P 500 gained 8.61 points, or 0.31 percent, to 2,778.98 and the Nasdaq Composite added 10.44 points, or 0.14 percent, to 7,645.51. For the week, the S&P rose 1.62 percent while the Dow added 2.76 percent and the Nasdaq gained 1.21 percent.

2.Hong Kong Equities

Hong Kong stocks fell the most in two weeks on Friday, as investors braced for a series of market-moving events next week including the U.S.-North Korea summit and the Federal Reserve's policy meeting. The Hang Seng index fell 1.76 percent, to 30,958.21, while the China Enterprises Index lost 1.95 percent, to 12,165.79 points. The sub-index of Hang Seng tracking energy shares dipped 1.73 percent, the IT sector fell 2.92 percent, the financial sector was 1.61 percent lower and the property sector declined 1.02 percent.

3. China Equities

Shanghai stocks slid almost 1.4 percent on Friday amid lackluster trading volume and weak market morale. Concerns over the listings of big-cap "unicorns" could drain liquidity from the market deepened after Foxconn Industrial Internet Co Ltd was listed. The index is expected to test previous lows at 3,041 as investors choose to stay on the sidelines.