I. Yesterday's News
International News
1. South Koreans began voting on Tuesday to elect a new leader, looking to move on from a corruption scandal that brought down former President Park Geun-hye. Unless there is a major upset, liberal Moon Jae-in - who calls for a moderate approach on North Korea, wants to reform powerful family-run conglomerates and boost fiscal spending to create jobs - will be elected president. A Gallup Korea poll published last Wednesday showed Moon with 38 percent support in a field of 13 candidates, with centrist Ahn Cheol-soo his nearest challenger with 20 percent.

2. U.S. economy's weak performance at the start of the year should slow Federal Reserve plans for further rate increases, now broadly expected to resume at the central bank's June meeting, St. Louis Federal Reserve bank president James Bullard said on Monday. “I worry we get back into calendar-based policy...and not paying attention to what is happening in the data,” said Bullard. Bullard's view is in the minority among a group of policymakers who feel increasingly confident the Fed can raise rates steadily over the next couple of years.

3. Saudi Arabia's oil minister said on Monday that oil producers would "do whatever it takes" to rebalance the market and that he expected a global deal on cutting crude output to be extended to the end of 2017 or possibly longer. "Based on consultations that I've had with participating members, I am confident the agreement will be extended into the second half of the year and possibly beyond," Saudi Oil Minister Khalid al-Falih said. OPEC and industry sources said there had been discussions about extending curbs until the end of the first quarter 2018, when crude demand is seasonally at its weakest.

4. British consumer spending growth slowed to one of its weakest rates in the past three years last month, credit and debit card company Visa reported on Monday, as higher inflation and weak wage growth squeeze households' disposable income. Visa said consumer spending rose by just 0.5 percent in April after adjusting for inflation, down from 1.0 percent in March. This was the lowest rate since January and well below a historic average of 1.4 percent. British house price growth remains at its weakest level for nearly four years, mortgage lender Halifax said on Monday, echoing other signs of a slowdown in the housing market amid uncertainty about the impact of Brexit on the economy. House prices rose 3.8 percent in the three months to April compared with the same period a year ago, the same pace as in March which was the weakest increase since May 2013. Economists taking part in a Reuters poll had expected the pace of house price growth to slow to 3.6 percent.

5. The European Central Bank is close to declaring that risks to growth are balanced, a departure from its generally more pessimistic stance, but its already announced measures should be implemented as agreed, ECB board member Yves Mersch said on Monday. “If the euro area economy recovers and inflation proceeds further on its path towards the ECB's inflation aim in a sustained manner, a discussion on policy normalisation becomes warranted in the future,” Mersch told a conference in Tokyo.

Domestic News
6. China does not want nor need to depreciate its currency to gain export competitiveness, and the PBOC's moves to inject liquidity into the forex market aim to avoid spillover of irrational depreciation and market panic, said Pan Gongsheng, head of SAFE. China will cautiously promote the opening of its capital projects, complete the formation of forex exchange mechanism, and reinforce the elasticity of exchange rates. China in the formulation and implementation of foreign exchange management policies, promotes two-way open financial markets, and guard against the risk of cross-border capital flows. The "open window" will not close, and the macro Prudential Management of cross-border capital flows and micro market supervision system shall be constructed.

7. The tax cut and other policies by the Donald Trump administration eased concerns over a sino-US trade war and currency war, but difference in macro policies between the two countries may trigger capital inflow to U.S. from China and other countries, sending the dollar higher, while uncertainty in China's macro economy may keep yuan in check, said Yu Yongding, an economist at the Chinese Academy of Social Sciences. These differences include interest rates hike, balance sheet tightening by the Federal Reserve, investment attraction and curb in capital outflow by U.S. Government via tax break, etc., Yu added.

8.China's import and export growth halved last month in dollar terms, slowing markedly more than expected, due to the high base in March and pullback in commodity prices. The leading PMI turned lower in April as price factor faded, suggesting worse-than-expected domestic and foreign demand in real terms and casting a doubt on the outlook in import and export growth.

9. China's participation of SOEs on the OBOR initiative aims to deepen cooperation between countries on equipment, technology, management and other areas in order to promote sustainable development of the global economy, said Xiao Yaqing, head of the State-owned Assets Supervision and Administration Commission (SASAC). Risks facing SOEs investing in the OBOR are generally controllable, Xiao said.

II. Market Overview
FX
1. Global Market
The euro fell from six-month highs against the dollar on Monday after Emmanuel Macron's victory in France's presidential election, as investors took profit on a roughly 3 percent gain for the currency since he won the first round two weeks ago. The euro rose as high as $1.1023, a six-month peak. It also jumped to a one-year high of 124.58 yen. But by late trading in New York, the euro fell 0.6 percent to $1.0932 against the dollar, and 0.4 percent against the yen to 123.56 yen. The dollar index, which tracks the U.S. currency against six rivals, added 0.4 percent to 99.067. The greenback also rose to a three-week high against the Swiss franc and was last up 1.1 percent at 0.9983 franc. It gained 0.2 percent against the yen to 113.06.

2. Home Market
China's yuan slipped against the dollar in the morning session. Market was quiet as Emmanuel Macron's victory in France's presidential election created favorable external environment for regulators to loose regulation, traders said. Forex prices are expected to see limited losses as regulators will keep depreciation outlook in check.

Precious Metals
Gold prices bounced off a seven-week low on Monday as safe haven demand ebbed away following pro-EU candidate Emmanuel Macron's victory in the French presidential election. Spot gold steadied after touching 1,224.86 an ounce, its lowest since March 17. It was last up at $1,225.80. U.S. gold futures settled up 0.02 percent at $1,227.10.

Commodities
1.Crude Oil
Oil prices rose on Monday in volatile trading, bolstered by statements from major oil-producing countries suggesting that OPEC and non-OPEC supply cuts could be extended into 2018. Benchmark Brent crude settled up 24 cents, or 0.5 percent, at $49.34 a barrel. U.S. light crude gained 21 cents to $46.43 a barrel.

2.Base Metals
Copper slid to a four-month low on Monday after data showed a sharp drop in imports into China, the world's biggest consumer, feeding pessimism over demand following hefty inflows into London Metal Exchange inventories last week. Three-month copper on the London Metal Exchange closed 1.8 percent down at $5,486 a tonne, having earlier touched $5,462.50, its lowest since Jan. 4.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury yields rose on Monday with benchmark yields hitting a four-week high in advance of the sale of $62 billion in bond supply at this week's quarterly refunding and following centrist Emmanuel Macron's victory in the French presidential run-off. The benchmark 10-year note yield was up 2 basis points at 2.374 percent after touching 2.390 percent earlier Monday which was the highest since April 10. The yield on 30-year bonds was 2 basis points higher at 3.011 percent, while the two-year yield was up 1 basis point at 1.330 percent.

2. Chinese bonds
Liquidity of China's interbank bond market eased on Monday, but cash bonds extended losses. The yield of the most active 10-year government bonds rose 4 bps to 3.60 percent in secondary market, hitting a 22-month high.

Stock Market
1. U.S. Equities
The S&P 500 ended flat on Monday after briefly touching a record high, while Wall Street's "fear gauge" dropped to its lowest in over two decades following centrist Emmanuel Macron's victory in the French presidential election. The CBOE Volatility index dropped 7.6 percent to close at 9.77, its lowest since 1993.

2. Hong Kong Equities
Hong Kong stocks ended higher on Monday as markets breathed a sigh of relief after pro-EU candidate Emmanuel Macron was elected French President, helping offset negative sentiment from continued weakness in mainland stock markets. The Hang Seng index ended up 0.4 percent at 24,577.91, while the China Enterprises Index gained 0.6 percent to 9,982.42 points.

3. China Equities
The Shanghai Composite Index fell to a 7-month low, extending losses to the fifth consecutive day, on bearish sentiment and lack of hot themes. Capital outflow picked up after technical supports were breached, led by defense and cyclical names. The index was still on the way to hit bottom as China's economy showed signs of peaking in the near term.