I. Yesterday’s News
International News

1. OPEC agreed on Friday on a modest increase in oil production from next month after its leader Saudi Arabia persuaded arch-rival Iran to cooperate, following calls from major consumers to curb rising fuel costs. The Organization of the Petroleum Exporting Countries said in a statement that it would raise supply by returning to 100 percent compliance with previously agreed output cuts, but gave no concrete figures. Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd), or 1 percent of global supply. Iraq said the real increase would be around 770,000 bpd because several countries that had suffered production declines would struggle to reach full quotas.

2. Euro zone private business growth recovered in June and rounded off the second quarter growing at a better-than-expected clip, bolstered by services firms, but manufacturing growth was the weakest in 18 months on trade worries, a survey showed. The survey covering the bloc's dominant service industry rose to 55.0 from 53.8 in May, the highest since February, and above all forecasts in a Reuters poll. But manufacturing growth eased with the flash June factory PMI down to 55.0, its weakest in 18 months.

3. Chinese oil buyers will keep taking crude from the United States through September, but plan to reduce future purchases to avoid a likely import tariff amid a trade spat between the world's two largest economies, multiple industry sources said. Beijing has put U.S. energy products, including crude oil and refined products, on lists of goods that it will hit with import taxes in retaliation for similar moves by Washington. Beijing did not specify when it will impose a 25 percent tax on oil, and that gives buyers time to adjust purchases while waiting for the outcome of trade talks, the sources said.

4. Japan's core inflation remained subdued in May, yet again highlighting how far off the central bank is in hitting its 2 percent price goal despite over five years of massive stimulus. The stubbornly weak inflation is also another reason why the Bank of Japan is widely expected to take some time before exiting its ultra-easy money policy, even as the Federal Reserve and the European Central Bank are far down the road in rolling back crisis-era policies. The core consumer price index, which includes oil products but excludes volatile fresh food prices, rose 0.7 percent year-on-year in May, unchanged from April, and matching economists' median estimate, Ministry of Internal Affairs and Communications data showed on Friday.

5. British police said on Friday they had arrested a man at London's Charing Cross railway station who claimed he had a bomb. “A man claiming to have a bomb at CharingCross station has now been arrested," British Transport Police said. "We are now working to reopen the station as soon as possible." Footage on social media showed a large police presence including armed officers at the station. Britain is on currently on its second highest threat level of "severe", meaning an attack by militants is considered highly likely.

6. U.S. President Donald Trump threatened to impose a 20 percent tariff on all European Union-assembled cars coming into the United States, a month after the administration launched an investigation into whether auto imports pose a national security threat. "If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!" Trump wrote on Twitter Friday. The U.S. Commerce Department aims to wrap up its investigation into whether imports of automobiles and auto parts pose a risk to national security by late July or August, Commerce Secretary Wilbur Ross said Thursday.

7. According to IHS Markit's flash PMIs, the services barometer dropped to a two-month low of 56.5 from 56.8, but beat economists’ forecast of 56.4. The Markit Manufacturing Flash PMI data for June slipped to a seven-month low of 54.6 from 56.4, lower than economists’ forecast of 56.5. Canadian retail sales in April dropped by 1.2 percent to 49.55 billion Canada dollars ($37.22 billion), in part due to bad weather that hit sales of autos, Statistics Canada said. The country’s consumer inflation rose 0.1 percent in May from the previous month. On a year on year basis, it climbed 2.2 percent. But the core CPI slipped 0.1 percent from April. Compared with the same period of last year, the reading rose 1.3 percent.

Domestic News

8. Chinese President Xi Jinping lambasted "protectionism, isolationism and populism" at the time of lackluster economic growth, urging joint efforts to expand market, instead of engaging in trade wars.

9. The Shanghai Pilot Free Trade Zone Administration issued 25 new rules to test the ground for further liberalization of the economy to widen the opening-up of its financial sector. Foreign financial institutions will be allowed to a wider range of businesses in banking, securities and insurance sectors. Under the rules commercial banks are allowed to form financial asset investment and management companies without any cap on foreign ownership.

10. Profit growth in China's state-owned enterprises (SOEs) accelerated in the first five months, official data showed. Combined profits surpassed 1.29 trillion yuan for the January-May period, up 20.9 percent from a year earlier - 10.7 percent than revenue growth, according to the Ministry of Finance. SOEs in sectors including iron steel, oil, petrochemical and coal posted large profit increases.

11. China's Ministry of Commerce on June 23, has started antidumping investigations on styrene monomer imports from South Korea, Taiwan and the US, the ministry said in a statement. Effective from June 23, antidumping duties of 3.8%-55.7% was implemented for a duration of five years.

II. Market Overview
FX
1. Global Market

The euro climbed on Friday as traders were encouraged by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency. The euro rose 0.5 percent to $1.1662, and increased 0.6 percent to 128.17 yen. An index that tracks the dollar versus a basket of currencies was down 0.24 percent at 94.517, retreating from an 11-month peak of 95.529 on Thursday.

2. Home Market

China's yuan fell to its lowest in more than five months against the dollar on Friday, hit by weaker central bank guidance. Lingering caution and continuous seasonal demand for the greenback kept yuan in check despite that the overnight dollar index fell from an 11-month high, traders said. Despite the yuan's stumble, analysts do not expect another round of sharp depreciation in the Chinese currency.

Precious Metals

Gold prices rose from six-month lows on Friday as the dollar slipped, but the modest nature of the recovery suggested speculators might still be poised to punish the metal further. Spot gold gained 0.2 percent at $1,268.76 per ounce, headed for a 0.8 percent weekly drop. In the prior session, bullion touched $1,260.84, its lowest since Dec. 19, 2017. U.S. gold futures for August delivery settled up 20 cents, 0.02 percent, at $1,270.70 per ounce.

Commodities
Crude Oil

Oil prices soared on Friday after oil producers agreed to modest crude output increases to compensate for losses in production at a time of rising global demand. Brent crude settled up $2.50, or 3.4 percent, to $75.55 a barrel. U.S. crude rose $3.04, or 4.6 percent, to $68.58 a barrel. Brent crude was up 2.7 percent on the week, while U.S. crude was up 5.5 percent.

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

U.S. Treasury yields were little changed on Friday, trading in narrow ranges, as risk appetite improved a bit with shares on Wall Street higher, but worries over a trade conflict with China kept investors cautious. In afternoon trading, U.S. 10-year yields were up slightly at 2.9 percent, from Thursday's 2.897 percent. U.S. 30-year yields were almost flat at 3.040 percent , compared with 3.043 percent on Thursday. On the short end, U.S. two-year note yields edged up to 2.549 percent, from 2.541 percent late on Thursday. The yield curve continued to steepen, with the spread between U.S. 5-year notes and 30-year bonds increasing for a sixth straight session to as much as 28.7 basis points . That is the widest gap in more than a week. Another yield curve measure, the gap between U.S. two-year and U.S. 10-year notes, widened as well, to 37.2 basis points .

2. Chinese bonds

Cash bond yields in China’s bond market entrapped into a tight range in the morning session after two volatile sessions. Despite of small net injection by the central bank at quarter-end, structural imbalance in capital flow was till highlighted, capping trading enthusiasm. More clues are needed for institutional investors before RRR is cut.

Stock Market
1. U.S. Equities

The S&P 500 and Dow Jones Industrial Average climbed on Friday, as the Dow put to rest an eight-day losing streak with a boost from energy stocks, but losses in the technology space kept the Nasdaq in check. The Dow Jones Industrial Average rose 119.19 points, or 0.49 percent, to 24,580.89, the S&P 500 gained 5.12 points, or 0.19 percent, to 2,754.88 and the Nasdaq Composite dropped 20.14 points, or 0.26 percent, to 7,692.82. For the week, the Dow lost 2 percent, its weakest weekly performance since late March. The S&P 500 fell 0.9 percent and the Nasdaq declined 0.7 percent.

2.Hong Kong Equities

Hong Kong's benchmark stock index ended slightly higher on Friday, but posted its biggest weekly loss in three months amid escalating trade tensions between Beijing and Washington. The Hang Seng index rose 42.65 points or 0.15 percent to 29,338.70, while the China Enterprises Index lost 0.22 percent to 11,339.87 points. For the week, the Hang Seng lost 3.2 percent, its worse weekly performance since late March.

3. China Equities

China stocks managed to end higher on Friday, boosted by tech sectors, such as IT, communication equipment, etc. While winners in the previous sessions, including coal, steel, non-ferrous metals and financial sectors, kept correction. Preliminary signs of bottoming-up show up after recent heavy losses, but the strength is limited. Market is expected to remain lows in coming sessions. The Shanghai Composite Index gained 13.95 points or 0.49 percent to 2,889.76 points. For the week, the index lost 4.37 percent. The turnover of Shanghai A shares slumped to an over four-month low of 127 billion yuan from previous session’s 159.6 billion yuan. The blue chip CSI300 index rose 0.44 percent to 3,608.90.