I. Yesterday's News
International News
1. U.S. job growth slowed more than expected in August after two straight months of hefty increases, but the pace of gains should be more than enough for the Federal Reserve to announce a plan to start trimming a massive bond portfolio. Persistently sluggish wage growth could, however, make the U.S. central bank cautious about raising interest rates again this year. Traders initially sold the dollar in a knee-jerk reaction to the report. But the dollar edged higher as U.S. jobs data was seen as decent enough to support the possibility of another interest rate increase from the Federal Reserve this year. The Labor Department said on Friday nonfarm payrolls increased by 156,000 last month, below expectations of economists polled by Reuters for a gain of 180,000. The unemployment rate ticked up to 4.4 percent against economists' forecast of 4.3 percent. Average hourly earnings rose three cents or 0.1 percent, worse than economists' forecast of 0.2 percent.

2. The headline ISM manufacturing index strengthened more than expected to 58.8 from the previous month's 56.3 when the Wall Street consensus was for only 56.5. That is the highest reading since April 2011. The employment index vaulted to 59.9 from 55.2- the best since June 2011. This is also higher than economists' consensus of 54.0. U.S. construction spending unexpectedly fell in July, hitting a nine-month low. The Commerce Department said that construction spending decreased 0.6 percent to $1.212 trillion. This is well below market consensus of a 0.5 percent increase, and followed a downwardly revised 1.4 percent tumble in June. The University of Michigan's consumer sentiment index rose to 96.8 in August from a final reading of 93.4 the month before. The result fell short of expectations for a reading of 97.4, according to a Reuters poll, and also slipped from a preliminary reading of 97.6 two weeks earlier.

3. The European Central Bank will discuss how to initiate a careful withdrawal from its asset purchase programme, rate-setter Ewald Nowotny said on Friday. “The question is not whether we should hit the brakes (on the programme) abruptly," Nowotny said. "But it's how to initiate normalisation carefully. This is the sensible discussion.” The growing uncertainty over the future of economic policy in the United States and weak global “reflationary” pressures make it more difficult to lift euro zone inflation, European Central Bank vice president Vitor Constancio said. “The growing uncertainty surrounding the strength of the world economic recovery, and of the U.S. in particular, makes the normalisation of inflation and unemployment levels in the euro area more difficult,” Constancio added.

4. Fitch maintained 'AAA' sovereign ratings of Germany with 'stable' outlook. The rating agency said the rating reflects Germany's diversified, high value-added economy, strong institutions and history of sound public debt management. The percentage of current account surplus in GDP fell slightly to 8.0 percent from 8.3 percent due to worse trade conditions.

Domestic News
5. China's National Development and Reform Commission, its top price setter and economic planner, has released road maps and timetables for price regulation in monopoly industries with the aim of realizing full coverage of network-type groups and crucial public utilities, and implementing a transparent and standardized system by 2020.

6. The Caixin manufacturing Purchasing Managers' Index jumped to the highest in six months, adding to the official manufacturing PMI in showing a stable pace in China's manufacturing sector boosted by strong new orders. A detailed analysis showed that the growth in new orders of official PMI was driven by domestic demand, while that of Caixin PMI index was boosted by a pickup in export order growth.

7. Overseas direct investment in the property sector by State-owned Enterprises (SoEs) cooled down sharply under the latest measures from Beijing to clamp down on overseas investment, but private enterprises, including insurers, property developers, are filling the gap, said CBRE, the world's premier, full-service real estate services company.

8. China's central bank said on Friday it had injected 399.50 billion yuan via the medium-term lending facility (MLF) and 34.04 billion yuan through the standing lending facility (SLF) in August. The balance of MLF, SLF and pledged supplementary lending (PSL) was 4.339 trillion yuan, 22.018 billion yuan and 2.5041 trillion yuan respectively by the end of August.

II. Market Overview
FX
1. Global Market
The U.S. dollar edged higher against a basket of major rivals on Friday after U.S. jobs data was seen as decent enough to support the possibility of another interest rate increase from the Federal Reserve this year. The euro last down 0.4 percent at $1.1866 against the greenback after briefly hitting a session high of $1.1979. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.1 percent at 92.801 after initially plunging 0.5 percent. The dollar was last up 0.2 percent against the yen at 110.21 yen after slumping to a session low of 109.57 yen just after the jobs data. The dollar was set to post its biggest weekly gain against the yen since early July, of about 0.8 percent. The dollar index is coming off its sixth consecutive monthly decline, although August's drop of 0.2 percent was the smallest since the streak began in March. Through August, the index had declined 9.3 percent, the worst first eight months to a year since 1986.

2. Home Market
China's yuan rose against the dollar in a choppy trading in the morning session, crossing over the key mark of 6.58 along with the offshore yuan, while the official yuan midpoint hit an over 14-month high. The onshore yuan breached above 6.57 late in the session. The overnight dollar index pared most gains, triggering stop-loss by the dollar bulls and driving up yuan. Investors are recommended to keep light positions due to lack of direction.

Precious Metals
Gold rose to the highest in nearly 10 months on Friday after U.S. job growth slowed more than expected in August, but pared gains when investors judged that the figures were unlikely to change the outlook for U.S. interest rate rises. Spot gold was up 0.2 percent at $1,324.46 an ounce after reaching $1,328.80, the highest since Nov. 9. It was set for a weekly gain of 2.6 percent. Spot palladium was 5.2 percent higher at $982 an ounce, the highest since February 2001.

Commodities
1.Crude Oil
Benchmark U.S. gasoline prices slid for the first day since Hurricane Harvey struck the U.S. oil industry heartland, as some refineries restarted operations, while oil prices remained under pressure and settled about flat. Brent crude for November settled 11 cents lower at $52.75 a barrel. The Brent contract for October, which expired on Thursday, closed up $1.52 at $52.38. U.S. crude settled 6 cents higher at $47.29 a barrel after trading lower for most of the day. For the week, Brent was up 0.65 percent while U.S. crude posted a weekly decline of 1.25 percent.

2.Base Metals
LME benchmark aluminium closed 0.9 percent higher at $2,136 a tonne after touching $2,145, the highest since February 2013. LME three-month nickel climbed 2 percent to end at $12,035 a tonne after touching $12,095, the highest since November 2016, after further gains in steel prices and strong factory data in top metals consumer China.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury yields rose on Friday as strong manufacturing data boosted sentiment that economic growth is solid, even after the August jobs report was weaker than economists expected. Benchmark 10-year yields fell to 2.10 percent in the immediate aftermath of the jobs data. They rose to 2.16 percent after the strong manufacturing figures. Some Treasury bill yields also jumped on Friday on concern over whether the U.S. government will be able to raise the debt ceiling later this month. August was the best month for Treasuries since June 2016, with a total return of 1.13 percent, according to Bank of America/Merrill Lynch Fixed Income Index data.

2. Chinese bonds
The cash bond yields in China's interbank market edged up in the morning session, while T-bonds pulling back in choppy trading. Buying in cash bonds was capped after China's Purchasing Managers' Index signaled improved fundamentals. Market sentiment remained cautious due to dimmed expectations on liquidity.

Stock Market
1. U.S. Equities
Wall Street gained modestly on Friday as a tepid U.S. jobs report kept expectations muted for another interest rate hike this year, while investors kicked off a typically dour month for stocks on a positive note. The Dow Jones Industrial Average rose 39.46 points, or 0.18 percent, to end at 21,987.56, the S&P 500 gained 4.9 points, or 0.20 percent, to 2,476.55 and the Nasdaq Composite added 6.67 points, or 0.1 percent, to 6,435.33. For the week, the S&P 500 rose 1.37 percent, the Dow Jones Industrial Average added 0.8 percent. The Nasdaq Composite increased 2.71 percent, the best week this year.

2. Hong Kong Equities
Hong Kong stocks took a breather on Friday to hover around more than two-year highs, fuelled by robust earnings, strong Chinese factory growth and hopes of more economic reforms from Beijing. Both the Hang Seng index and the China Enterprises Index dripped 0.1 percent, to 27,953.16 points and 11,285.55 points, respectively.

3. China Equities
China's stocks rose to a 20-month high on Friday, after hitting 3,381.93 during the session led by steel, nonferrous metals, coal, and other cyclical sectors, traders said. The Shanghai Composite Index settled at 3,367.12, up 6.31 points or 0.19 percent, drawing near to the high of 3,519.18 toughed on December 31, 2015. For the week, the index rallied 1.07 percent.