I. Yesterday’s News
International News

1. The man in charge of the European Central Bank's money-printing program expects the ECB to drop by next September its pledge to continue buying bonds until inflation heads towards its target, he told a German newspaper. The ECB decided to cut the pace of its bond purchases to 30 billion euros per month at its October meeting but pledged to continue the stimulus program until it is confident that inflation was "consistent with its inflation aim" of just under 2 percent. But Benoit Coeure, the ECB director in charge of its market operations, expected this part of the policy message to change by September. "We were not ready to make that change in October, but I expect it will come at some point between now and September 2018," Coeure said.

2. U.S. home sales increased more than expected in October as hurricane-related disruptions eased, but a chronic shortage of houses which is pushing prices beyond the reach of some first-time buyers remains an obstacle. The National Association of Realtors said on Tuesday that existing home sales rose 2.0 percent. Economists had forecast home sales rising 0.7 percent. The number of previously owned homes on the market fell 3.2 percent, while the median house price increased 5.5 percent. The PHLX housing index was trading higher in line with a broadly firmer stock market. The dollar slipped against a basket of currencies while prices for U.S. Treasuries rose.

3. Bank of England rate-setters spelled out their differences on Tuesday over the central bank's first interest rate hike in a decade. Four of the Monetary Policy Committee's nine members spoke to lawmakers. Gertjan Vlieghe, an external MPC member, said he switched his vote to support the rate hike due to signs that employers were finding it harder to recruit staff and that employees were more confident about changing jobs for higher pay. He also said measures of underemployment were falling. Another MPC member who voted for the rate hike, Michael Saunders, said he thought the unemployment rate could fall only a little bit further before it started to push up inflation.

4. The Japanese government is leaning towards cutting its mid- to long-term gross domestic product and inflation estimates in its outlook report due in January, to factor in a more realistic scenario of economic growth, government sources told Reuters. The government currently projects nominal economic growth will reach as much as 3.9 percent for the fiscal year ending March 2021. It has estimated annual consumer inflation will be stable around 2.0 percent from fiscal 2021.

Domestic News

5. China’s Ministry of Finance has formulated a draft law on resource tax in a bid to exempt tax on crude oil and natural gas that were used for heating during crude mining, and transportation within oil fields, and cut 30 percent resource tax on crude oil and natural gas that were mined from deep-water oil and natural gas fields. It said conditions are not ripe for legislation on a water resource tax, noting that further pilot reform is needed to improve the tax system.

6. China’s President Xi Jinping calls for 'unswervingly' pushing forward reform in the first meeting of the Leading Group for Deepening Overall Reform of the 19th Communist Party of China Central Committee. According to the conference, the State Council, China's Cabinet, should report the management situation of State-owned assets to the National People's Congress, the top legislature, ensuring the management of State-owned assets is open and transparent.

7. China's state-owned enterprises (SOEs) continued to see rapid profit growth in the first 10 months of the year. Combined SOE profits rose 24.6 percent year-on-year to 2.39 trillion yuan for the January-October period, the Ministry of Finance said. That was 9.2 percent higher than business revenue growth. SOEs in the non-ferrous metal, steel, coal, oil and petrochemical industries enjoyed relatively large profit increases, but power generation firms suffered significant declines, the data showed.

II. Market Overview
FX
1. Global Market
The dollar turned broadly lower on Tuesday, moving in line with declining U.S. 10-year Treasury yields and retracing gains from Monday in light trading ahead of Thursday's Thanksgiving holiday in the United States. The dollar index, which tracks the greenback against a basket of six major rivals, fell 0.1 percent to 93.970, but remained within sight of an overnight peak of 94.104, its highest since Nov. 14. The euro edged up 0.1 percent to $1.1740. The single currency registered its biggest one-day fall since Oct. 26 on Monday but investors then looked beyond Germany's political impasse to focus on the euro zone's still-robust economy. The dollar fell 0.2 percent against the yen to 112.43 yen and 0.15 percent against the Swiss franc to 0.9918 franc, but remained largely within its trading ranges from the previous session against both currencies.

2. Home Market

China's yuan pared gains against the U.S. dollar, after hitting a one-week low in line with the the official midpoints. Uncertainty over Germany’s political impasse pushed up the dollar index overnight, but was muted on yuan. The China’s currency is expected to extend consolidation due to lack of key events.

Precious Metals

Gold bounced up slightly on Tuesday, as a weaker U.S. dollar gave bullion a boost after the previous day's sharp decline and as investors awaited the minutes, due on Wednesday, of the Federal Reserve meeting held in November. Spot gold was up at $1,280.41 an ounce. U.S. gold futures for December delivery settled up $6.40, or 0.5 percent, at $1,281.70 per ounce.

Commodities
1.Crude Oil

Oil edged up on Tuesday, supported by expectations that OPEC and other producing countries next week would extend output cuts, but signs of higher U.S. crude output kept prices under pressure. Brent futures rose 35 cents, or 0.6 percent, to settle at $62.57 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 41 cents, or 0.7 percent, to settle at $56.83 per barrel.

2.Base Metals

Aluminium prices fell on Tuesday towards the near-three-month lows hit last week on expectations that the pace of supply cuts from top producer China would slow and demand growth weaken. Benchmark aluminium on the London Metal Exchange ended down 0.2 percent at $2,082 a tonne. Copper closed up 1.2 percent at $6,909 after touching $6,928.50, its highest since Nov. 13. Zinc rose 0.9 percent to $3,190 a tonne, lead was up 0.8 percent at $2,479, and nickel added 1.8 percent to $11,870.

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

The U.S. Treasury yield curve flattened to its lowest in a decade on Tuesday as investors awaited minutes from the Federal Reserve’s last meeting, with no major economic releases due this week and trading subdued before the U.S. Thanksgiving holiday. Benchmark 10-year notes rose 2/32 in price to yield 2.36 percent, down from 2.37 percent on Monday. The yield curve between two-year and 10-year notes flattened to a low of 57.4 basis points, the flattest level since late 2007.

2. Chinese bonds

Yields of China’s five-year Treasury bonds 170014 was 3.9196 percent, slightly lower than 3.94 percent in secondary market, after Ministry of Finance bought in Treasury bonds in the morning session.

Stock Market
1. U.S. Equities

U.S. stocks jumped on Tuesday, pushing all three major indexes to record closing highs, led by gains in this year's top-performing technology sector. The Dow Jones Industrial Average rose 160.5 points, or 0.69 percent, to 23,590.83, the S&P 500 gained 16.89 points, or 0.65 percent, to 2,599.03 and the Nasdaq Composite added 71.76 points, or 1.06 percent, to 6,862.48.

2. Hong Kong Equities

Hong Kong's main Hang Seng index had its best day in seven weeks on Tuesday, as did the China H-shares index. Index heavyweight Tencent Holdings jumped 2.4 percent to another record, boosting market sentiment. At close of trade, the Hang Seng index was up 557.76 points or 1.91 percent at 29,818.07. The Hang Seng China Enterprises index rose 2.91 percent to 11,874.37. The sub-index of the Hang Seng tracking energy shares rose 0.7 percent while the IT sector rose 2.07 percent, the financial sector was 2.99 percent higher and the property sector rose 0.22 percent.

3. China Equities

China’s stocks rose for the second consecutive day in a choppy trade on Tuesday, led by financial, home appliances, property sector. Despite under selloff pressure around the 10-day moving average of 3,413, major indexes remained high throughout the session. The benchmark Shanghai Composite Index settled up 18.10 points or 0.53 percent to 3,410.50. The CSI300 closed at 4,217.70, up 1.78 percent.