I. Yesterday’s News
International News

1. U.S. President Donald Trump said on Friday he would hold a summit with North Korean leader Kim Jong Un on June 12 in Singapore. Meanwhile, he lauded his Chinese counterpart Xi Jinping's efforts on the Democratic People's Republic of Korea, calling them a "great help".
A summit between Russian and North Korean leaders could take place, the Kremlin spokesman said on Friday, adding that the format and timing of such meeting will be coordinated by the diplomats.
The two Koreas agreed at a high-level meeting on Friday to hold talks this month on military issues and reunions of families, they said in a statement.
The meeting will be held in the border village of Panmunjom in the demilitarized zone on June 14.

2. U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 percent, pointing to rapidly tightening labour market conditions, which could stir concerns about inflation. The closely watched employment report released by the Labor Department on Friday also showed wages rising solidly, cementing expectations that the Federal Reserve will raise interest rates this month and boosting the probability of two more hikes later in the year. It renewed fears about the economy overheating.

3. The Trump administration may soon claim as much as $1.7 billion penalty from ZTE Corp, and is also seeking unfettered site visits to verify U.S. components are being used as claimed by ZTE, according to people familiar with the matter.

4. U.S. is isolated at a G7 finance ministers meeting in Canada due to Washington's new trade tariffs on its allies, French Finance Minister Bruno Le Maire said on Friday.
Canada filed a challenge to the U.S. tariff on steel and aluminum with the World Trade Organization, and will closely collaborate with the European Union. Canada's finance minister Bill Morneau called the Trump administration's rationale for the tariffs "absurd", saying it will push up consumer prices and business cost in Canada.
The European Union submitted a request for consultations with the United States on steel and aluminum tariffs announced by Washington, a first step in the WTO dispute settlement process, a World Trade Organization official said.
U.S. President Donald Trump on Friday fired back at Canada after Ottawa and other American allies retaliated against Washington's steel and aluminum tariffs, and appeared to threaten possible action against Canada's lumber industry.

5. U.S. President Donald Trump said on Friday he might prefer to end the North American Free Trade Agreement (NAFTA), which the United States is renegotiating with Canada and Mexico, in favor of two bilateral agreements with its neighbors.

Domestic News

6. The State Council, China's cabinet, announced that Liao Min was appointed deputy minister of finance, while Zhu Guangyao and Jiang Yang is no longer deputy minister of finance and vice chairman of China Securities Regulatory Commission.

7. China's manufacturing sector expanded at a steady pace in May, expanding for the 12th consecutive month as new business sub-index picked up and the output sub-index rose to a three-month high. The Caixin survey suggests China's factories have maintained solid overall growth, adding resilience into China’s economy.

8. Japan called on the United States to join forces in stopping China from taking market-distorting investment practices in a bilateral finance leaders' meeting, a senior Japanese finance ministry official said on Thursday.

9. Chinese Foreign Minister Wang Yi said Germany should support China’s investment in the country, and China will provide German companies operating in China with broader space and more opportunities.

10. Taiwan’s seasonly adjusted manufacturing PMI receded to 53.4 in May from April’s 54.8, remaining above the 50-point mark that separates growth from contraction for two years. But the updated figure suggests its strength has slowed the weakest in 11 months.

II. Market Overview
FX
1. Global Market

Better-than-expected U.S. employment data on Friday kept the dollar afloat, even as the European Union, Canada and Mexico are expected to retaliate to the import tariffs on steel and aluminum announced by President Donald Trump. Against a basket of six currencies, the dollar rose half a percent to a session high of 94.45.

2. Home Market

China's yuan eased slightly against the dollar despite of a higher mid-point rates on Friday, as demand for forex mounted. The euro steadied after the political turmoil in Italy eased. Yuan is expected to trade between 6.4-6.45 per dollar.

Precious Metals

Gold fell on Friday after stronger than forecast U.S. payrolls data boosted expectations that the Federal Reserve will press ahead with another U.S. interest rate hike this month, lifting the dollar. Spot gold lost 0.2 percent at $1,295.19 by 1732 GMT, earlier peaking above $1,300 an ounce. U.S. Gold futures for August delivery settled down $5.40, or 0.4percent, at $1,299.3 per ounce. Spot gold is poised to close the week about 0.5 percent lower.

Commodities
Crude Oil

Oil prices retreated on Friday after the dollar rose on better-than-expected U.S. employment data, which pressured greenback-denominated commodities, including crude. U.S. West Texas Intermediate (WTI) crude futures fell $1.23 a barrel to settle at $65.81 a barrel. For the week, WTI was on track to drop about 3 percent, adding to last week's near 5 percent decline. Global benchmark Brent fell 77 cents to $76.79 a barrel. It was set for a 0.4 percent gain for the week.

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

U.S. Treasury yields rose on Friday, after data showed the world's largest economy created more jobs than expected in May, cementing expectations of at least two more rate hikes by the Federal Reserve. In mid-morning trading, U.S. 10-year yields rose 2.894 percent , from Thursday's 2.822 percent. U.S. 30-year yields also advanced to 3.045 percent , compared with 2.985 percent late Thursday. U.S. two-year yields were up at 2.471 percent, from 2.411 percent on Thursday.

2. Chinese bonds

Yields of China’s cash bonds in the inter-bank market were little changed, while T-bond futures edged up. Market morale was boosted by improved liquidity and lower U.S. Treasury bonds yields. But investors remained cautious due to upbeat fundamentals, awaiting the central bank’s moves amid strong calls for RRR cut. Bond market is expected to consolidate in the near term, awaiting more clues.

Stock Market
1. U.S. Equities

Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the US economy and geopolitical tensions eased. The Dow Jones Industrial Average rose 219.37 points, or 0.9 percent, to 24,635.21, the S&P 500 gained 29.35 points, or 1.085 percent, to 2,734.62 and the Nasdaq Composite added 112.22 points, or 1.51 percent, to 7,554.33. For the week, the S&P rose 0.48 percent, the Dow lost 0.48 percent, and the Nasdaq gained 1.62 percent.

2.Hong Kong Equities

Hong Kong shares rose slightly on Friday as fears over a political crisis in Italy eased. The Hang Seng index rose 24.35 points or 0.08 percent, to 30,492.91, while the China Enterprises Index gained 0.35 percent, to 12,020.09 points.

3. China Equities

Chinese stocks slid on Friday dampened by softening U.S. stocks overnight. Hot themes shifted quickly, as shown by rebounding cyclicals and plunging consumer names. Overall, market remained weak and is looking for a bottom as investors prefer to staying on the sidelines, closely watching Sino-U.S. trade talks.