I. Yesterday's News
International News
1. Federal investigators probing Russian interference in the 2016 U.S. election charged President Donald Trump's former campaign manager Paul Manafort and another aide, Rick Gates, with money laundering on Monday. A third former Trump adviser, George Papadopoulos, pleaded guilty in early October to lying to the FBI, it was announced on Monday. It was a sharp escalation of U.S. Justice Department Special Counsel Robert Mueller's five-month-old investigation into alleged Russian efforts to tilt the election in Trump's favor, and into potential collusion by Trump aides.

2. President Donald Trump is likely to pick Federal Reserve Governor Jerome Powell as the next head of the U.S. central bank, a source familiar with the matter said on Monday, prompting investors to push down yields on Treasury notes. The Republican president, who is considering Powell, current Fed Chair Janet Yellen and three others for the top central bank job, will announce his decision on Thursday, a White House official said separately. By picking Powell, a soft-spoken centrist and Fed governor since 2012, Trump would get the combination of a leadership change and the continuity offered by somebody who has been a part of the Yellen-run Fed that has kept the economy and markets steady in recent years.

3. U.S. consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted. The Commerce Department said on Monday consumer spending jumped 1.0 percent last month. The increase, which also included a boost from higher household spending on utilities, was the largest since August 2009. The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, edged up 0.1 percent in September. The so-called core PCE has now increased by 0.1 percent for five straight months.

Domestic News
4. China's President Xi Jinping said China will stick to the basic state policy of opening-up, holding high the banner of mutual benefit, and implement strategy of coordinated regional development to build up a socialist market economy. President Xi said China would deepen economic reforms as it transitions from high-speed to high-quality growth.

5. China's National Bureau of Statistics will work with regional statistics agencies to compile regional data, replacing the current system in which regional GDP data is compiled by regional statistics agencies to push forward inclusion of research and development spending into regional GDP data, and improve the long-standing discrepancy between national and regional GDP data, National Bureau of Statistics Deputy Head Li Xiaochao said.

6. The China International Capital Corp (CICC) raised its forecast for China's 2018 real GDP growth to 6.9 percent year-on-year, citing optimism on consumption and investment in property and manufacturing. The annual consumer price index (CPI) may rise from 1.6 percent in 2017 to 2.5 percent in 2018, while the annual producer price index (PPI) may return to “normalcy” at about 3 percent.

7. Air quality in the Chinese capital and neighboring regions showed no improvement in September compared with last year, data from the Ministry of Environmental Protection (MEP) showed on Saturday. Of 74 cities monitored by the MEP, Xingtai, Shijiazhuang, Taiyuan, Handan, Tangshan, Baoding, Beijing, Langfang, Zhengzhou and Tianjin were China's most polluted cities last month (ranking 74-65). Six cities are in Hebei province, while Beijing remains at the list. Tangshan in Hebei Province was the most polluted, followed by  Zhengzhou, Tianjin, Hengshui, Xuzhou and Lanzhou. The number of good air days in 13 cities in Jingjinji (Beijing, Tianjin and Heibei) was down 14.1 percentage points.

II. Market Overview
FX
1. Global Market
The U.S. dollar fell on Monday after posting its biggest weekly rise this year last week as investors took profits and grew cautious amid news that President Donald Trump's former campaign manager faces charges of conspiracy against the United States. The day's risk aversion lifted the Japanese yen, often sought in times of geopolitical uncertainty, against the greenback. The dollar fell to a one-week low against the yen of 113.04 yen. The euro gained 0.25 percent against the dollar, bouncing back from a three-month low touched Friday.

2. Home Market
China's yuan inched up against the U.S. dollar on Monday with its official yuan midpoint slightly lowered. The movement of yuan lacked direction due to uncertainties in Europe and U.S., and as some institutional investors tried to boost trading volume. Yuan is expected to remain stable rangebound before real demand is unleashed in mid-moth.

Precious Metals
Gold rose on Monday ahead of a series of central bank meetings and U.S. President Donald Trump's expected announcement of the next Federal Reserve chair, and amid a slightly weaker U.S. Dollar. Spot gold was up at $1,275.86 an ounce, little changed from its late Friday level at $1,272.60. U.S. gold futures for December delivery settled up $5.90, or 0.5 percent, at $1,277.70 per ounce.

Commodities
1.Crude Oil
Brent oil closed on Monday at its highest level since July 2015 and U.S. crude closed at a peak not seen since February on expectations OPEC-led production cuts would be extended beyond March, although such gains are likely to spur more U.S. Production. Brent crude futures settled at $60.90 a barrel, up 46 cents. Brent has gained 9.5 percent in the last 16 trading days. U.S. West Texas Intermediate (WTI) crude futures settled up 25 cents at $54.15 a barrel, highest since Feb. 23, 2017. The U.S. contract has been strong of late as well, gaining 10 percent in the last 16 trading days.

2.Base Metals
Copper rose on Monday, pulling away from the previous session's two-week low as a retreat in the dollar after its biggest one-week gain this year tempted buyers back to the metal. London Metal Exchange copper ended the day up 0.5 percent at $6,867 a tonne. Tin, which has underperformed other base metals throughout the year, ended at an 11-week low of $19,400 a tonne, down 2.4 percent. LME aluminium finished the day down 0.2 percent at $2,163 a tonne. LME zinc closed up 1.2 percent at $3,209 a tonne.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury debt yields fell on Monday on news reports that U.S. President Donald Trump is likely to appoint Federal Reserve Governor Jerome Powell, who is viewed as more dovish than other contenders, as head of the Federal Reserve. The yield curve between five-year notes and 30-year bonds steepened as high as 90.50 basis points, up from 88.8 basis points on Friday. Benchmark 10-year notes gained 15/32 in price to yield 2.37 percent, down from 2.43 percent on Friday.

2. Chinese bonds
Yields of 10-year Treasury bonds in China's interbank market rose above 3.90 percent to the highest since October 2014 as stop-loss bets emerged on panic sentiment in the afternoon session. Yields of CFFEX's Treasury futures expanded losses by over 1 percent.

Stock Market
1. U.S. Equities
Wall Street pulled back from record-high territory on Monday, weighed down by a drop in Merck shares and a report that U.S. lawmakers are discussing a gradual phase-in of much-anticipated corporate tax cuts. Investors were also digesting the impact to Trump's agenda from news that his former campaign manager, Paul Manafort, was charged with money laundering in the federal probe into Russian meddling in the 2016 presidential election. The Dow Jones Industrial Average fell 85.45 points, or 0.36 percent, to 23,348.74, the S&P 500 lost 8.24 points, or 0.32 percent, to 2,572.83 and the Nasdaq Composite dropped 2.30 points, or 0.03 percent, to 6,698.96.

2. Hong Kong Equities
Hong Kong shares fell on Monday, bucking the trend in Asia markets, with sentiment hurt by a slump in mainland stocks that was triggered by liquidity concerns. The Hang Seng index fell 0.4 percent, to 28,336.19, while the China Enterprises Index lost 0.7 percent, to 11,563.38 points.

3. China Equities
China's stocks closed down in rising trading volume, posting the largest one-day drop in 2-1/2 months. Major indexes pared some losses after sharp decline earlier in the session, and individual stocks fell across the board, traders said. Structural adjustment can be expected on heavy selling pressure, tight liquidity, and mounting technical pressure encountered by the Shanghai Composite Index under the key resistance of 3,400.