I. Yesterday's News
International News
1. A driver in a rented pickup truck mowed down pedestrians and cyclists on a bike path in lower Manhattan on Tuesday, killing eight people and injuring about a dozen others in what authorities said was an act of terrorism. The driver, armed with a paint-ball gun and a pellet gun, was shot by police and taken into custody.

2. U.S. consumer confidence jumped to a near 17-year high in October, with households upbeat about the labor market and business conditions, which could underpin consumer spending and boost the economy in the final three months of the year. The Conference Board said its consumer confidence index increased 5.3 points to 125.9 this month, the highest reading since December 2000. The economy's prospects were further bolstered by other reports on Tuesday showing an acceleration in wage growth in the third quarter and sustained increases in house prices in August. The strong domestic fundamentals likely keep the Federal Reserve on track to raise interest rates in December.

3. China has made progress in rebalancing away from external-led growth, noted Zhang Longmei, IMF deputy resident representative of China. "And it is moving toward a more service-dominated economy," she said. But the core problem faced by China's economy in the future is still its over-dependence on debt, where structural reform is needed. Judging from the rising market rates, China's regulators are tightening financing tools, resulting in slower growth of internal interests in financial institutions, slight slower credit support to real economy, and cooling property market under tightening policy.

4. Britain is accelerating preparations for "all eventualities" when it leaves the European Union, but both sides are hopeful an agreement on stepping up talks to unravel more than 40 years of partnership will be sealed soon. The pressure has spurred the British government to step up its Brexit plans, employing thousands more workers and spending millions to make sure customs posts, laws and systems work on day one of Brexit. Brexit minister David Davis said he believed Britain would agree some kind of basic deal with the European Union, even in the "very improbable" eventuality that they failed to agree a trade deal.

Domestic News
5. China's official manufacturing PMI growth softened to a three-month low in October largely due to weak production and new orders on top of the National Day holiday and tighter measures on environmental protection. The low October PMI, together with the lowest nonofficial PMI since April indicated moderation in the fourth quarter from previous quarters.

6. Beijing will unveil an official house rental supervision and transaction platform, that will be linked to online transaction platforms jointly built by Beijing Real Estate Association, Lianjia, 5i5j, China Construction Bank, as an important carrier to a housing system paying equal attention to housing renting and purchasing.

7. China's state oil major Sinopec is evaluating two projects in the United States that could boost Gulf Coast crude oil exports and also expand storage facilities in the Caribbean, two people familiar with the matter said on Tuesday, with U.S. President Donald Trump set to visit Beijing next week.

8. U.S. Secretary of Commerce announced that the Department will defer issuing its preliminary determination in the antidumping duty (AD) investigation on aluminum foil from China.  The deferral will allow the Commerce Department to fully analyze information pertaining to China's status as a non-market economy (NME) country. China said the U.S. refusal to classify it as a market economy was a “serious distortion” of the facts, urging the United States to earnestly fulfill its international obligations, and take real action to correct its mistaken methods.

9. Seoul and Beijing have agreed to work swiftly to get their relations back on track following a year-long standoff over the deployment of a U.S. anti-missile system in South Korea which hurt trade and South Korean business interests in China.

II. Market Overview
FX
1. Global Market
The dollar edged higher on Tuesday, underpinned by solid U.S. data, and headed toward its strongest monthly performance since February. The greenback touched its highest level of the day against a basket of major currencies in early trading following the concurrent release of U.S. and Canadian data showing solid labor costs for the United States and disappointing growth and inflation readings for its northern neighbor. The dollar was last up 0.45 percent against the yen to 113.68 yen.

2. Home Market
China's yuan, following its official yuan midpoint, rose against the U.S. dollar throughout the session on Tuesday. A corrected dollar index overnight pulled yuan's bulls in, but the moderate rebounding dollar index is expected to keep yuan's growth in check, and will continue to weigh on yuan as the next Fed Chair is nominated and U.S. tax reform is passed.

Precious Metals
Gold prices fell on Tuesday as the U.S. dollar was firm for much of the session and precious metals investors turned cautious ahead of central bank meetings this week, U.S. payrolls data and the announcement of the next U.S. Federal Reserve chair. Spot gold slipped to $1,271.2 an ounce from Monday's $1,275.86 an ounce. U.S. gold futures for December delivery settled down $7.20, or 0.6 percent, at $1,270.50 per ounce, a 1 percent monthly decline.

Commodities
1.Crude Oil
Oil prices settled higher again on Tuesday, notching a monthly gain of more than 5 percent, but analysts said bullish sentiment that has driven Brent crude to its highest in more than two years could encourage U.S. producers to export more oil. U.S. West Texas Intermediate crude (WTI) settled up 23 cents or 0.4 percent to $54.38.

2.Base Metals
Copper fell on Tuesday as its rebound from Friday's 2 percent drop was arrested by concerns that the market had become overextended during this month's push to three-year highs above $7,000 a tonne. Three-month copper on the London Metal Exchange closed at $6,839 tonne, down 0.4 percent. LME nickel closed up 5.3 percent at $12,295 a tonne. In electronic trade it hit its highest since June 2015 at $12,455 a tonne. Volumes are expected to be muted this week as traders, producers and end-users gather in London for a key industry conference.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury debt prices were steady on Tuesday as investors awaited a heavy calendar of events that market participants expected could prompt volatile prices moves for the rest of the week. On Wednesday the Treasury Department will release its refunding plans, the Federal Reserve will conclude its two-day policy meeting and Republican lawmakers may introduce a bill to cut taxes. Benchmark 10-year notes were last down 1/32 in price to yield 2.37 percent, little changed on the day. The yield curve between five-year notes and 30-year bonds flattened to 86.50 basis points on Tuesday, from 88.20 basis points on Monday.

2. Chinese bonds
China's interbank bond market steadied in the morning session. Yields growth snapped as disappointing official October PMI report and MLF demand eased panic sentiment. But the correction is expected to be limited due to lingering tightening liquidity at month-end.

Stock Market
1. U.S. Equities
A jump in shares of consumer companies Mondelez and Kellogg after their quarterly reports on Tuesday, along with further gains for tech stocks, helped Wall Street end October on a positive note. The three major indexes tallied their best monthly gains since February. The Dow Jones Industrial Average rose 28.5 points, or 0.12 percent, to 23,377.24, the S&P 500 gained 2.43 points, or 0.09 percent, to 2,575.26 and the Nasdaq Composite added 28.71 points, or 0.43 percent, to 6,727.67.

2. Hong Kong Equities
Hong Kong shares fell on Tuesday, with investors' risk appetites curbed by a stronger-than-expected cooling in China's factory activity in October. The Hang Seng index dipped 0.3 percent, to 28,245.54, while the China Enterprises Index lost 0.5 percent, to 11,507.72 points. For the month, Hang Seng rose 2.5 percent, while HSCE gained 5.5 percent.

3. China Equities
China's stocks closed up in shrinking trading volume. The Shanghai Composite Index hovered around the previous session's closing level before inching up, lifted by the medium and small caps led by high-end manufacturing names. Technical front, the downward momentum is expected to extend in the near term, but decline would be limited.