I. Yesterday's News
International News
1. President Donald Trump on Tuesday warned North Korea he was prepared to use the full range of U.S. military power to stop any attack, but in a more conciliatory appeal than ever before he urged Pyongyang to "make a deal" to end the nuclear standoff. Speaking on North Korea's doorstep during a visit to Seoul, Trump said that while "we hope to God" not to have to use all of the United States' military might, he was ready to do whatever was necessary to prevent the "North Korean dictator" from threatening millions of lives. But at times taking a more measured, less confrontational tone, Trump also urged North Korea to "do the right thing" and said: "I do see some movement", though he declined to elaborate.

2. All major Gulf stock markets slid on Tuesday. U.S. President Donald Trump endorsed the crackdown, saying some of those arrested have been "milking" Saudi Arabia for years, but some Western officials expressed unease about the possible reaction in Riyadh's opaque tribal and royal politics. Investors worry that his campaign against corruption - involving the arrests of the kingdom's most internationally known businessmen - could see the ownership of businesses and assets become vulnerable to unpredictable policy shifts.

3. Australia's central bank held rates at record lows for a 14th straight policy meeting on Tuesday and signs were they would stay sidelined for months to come in the face of stubbornly low inflation and caution among debt-laden consumers. Wrapping up its monthly board meeting, the Reserve Bank of Australia (RBA) stuck with a prediction that economic growth would pick up to around 3 percent over the next few years, nudging unemployment down from the current 5.5 percent.

4. Japanese wages fell 0.1 percent in September from a year earlier after adjustment for inflation, down for the fourth straight month, suggesting consumer inflation could take a hit as salaries fail to keep pace with rising prices. Wage earners' nominal cash earnings rose 0.9 percent compared with the same month last year, accelerating from 0.7 percent growth in August and marking the fastest rise since July 2016.

Domestic News
5. China has introduced a new tax policy for small- and medium-sized enterprises in a bid to inject fresh impetus to the economy and to support such businesses. China's ministry of finance (MOF) decreed that small-scale value-added tax (VAT) taxpayers whose monthly sales range from CNY20,000 to CNY30,000 will be continuously exempt from VAT from Jan. 1, 2018, to Dec. 31, 2020, said a notice issued on the MOF website.

6. Chinese Ministry of Public Security has told police to step up the crackdown on financial crime, with a focus on illegal fundraising, online finance, securities and futures market and financial institutions. A ministry document said that China faced a high incidence of financial violations that could involve large numbers of people, creating significant risk for the finance sector. It said fighting such crime would prove a tough task.

7. A senior executive at China Minsheng Bank is being investigated by the governments banking watchdog on suspicion of serious violation of discipline, including collusion in false confession, transfer of embezzlement, etc. Lin Xiaoxuan, the banks chief information officer, is under review by the China Banking Regulatory Commission (CBRC), according to a notice on the Central Commission for Discipline Inspections.

8. China's will further its opening-up in financial sector, deepen some systematic reform to push forward Renminbi internationalization, facilitate internationalized portfolio of domestic capital and globalized layout of China's enterprises, said Ba Shusong, chief economist at the China Banking Association. China also will reinforce risk management in this process and further complete the structure of macro-prudential policy.

9. China will implement new preferential policy to Taiwan enterprises and Taiwan residents in China's mainland, including setting up two Taiwan banks and introducing a new version of her Mainland Travel Permit (MTP), said Chen Deming, President of Association for Relations Across the Taiwan Straits.

II. Market Overview
FX
1. Global Market
The dollar edged higher against a basket of currencies on Tuesday, as investors renewed their focus on diverging monetary policy between the United States and the euro zone. The dollar index, which tracks the greenback against six major currencies, was up 0.17 percent at 94.921. The index is just shy of the three-month high of 95.150 hit late last month. The euro was 0.2 percent lower at $1.1586 against the dollar. Its session low was $1.1555, its lowest since July 20.

2. Home Market
China's yuan edged up against the U.S. Dollar, following a higher official midpoint, in the morning session on Tuesday. The currency steadied within the range between $6.6-6.65 ahead of U.S. President Donald Trump's visit to China and due to lack of direction in the dollar.

Precious Metals
Gold prices fell 0.5 percent on Tuesday, retreating a bit from the previous day's rally as a stronger U.S. dollar reduced the appeal of safe-haven investments, and oil prices also dipped. Spot gold was down at $1,275.46 an ounce, while U.S. gold futures for December delivery settled down $5.80, or 0.5 percent, at $1,275.80 per ounce.

Commodities
1.Crude Oil
Oil settled lower on Tuesday after rising to the highest since July 2015 the previous day, while tension flared between Saudi Arabia and Iran, and the Saudi crown prince tightened his grip on power. Brent crude futures settled down 58 cents, or 0.9 percent, at $63.69 a barrel, having climbed 3.5 percent on Monday. U.S. West Texas Intermediate (WTI) crude fell 15 cents, or 0.3 percent, to $57.20 a barrel.

2.Base Metals
Nickel fell sharply on Tuesday as a stronger dollar encouraged investors to take profits after prices rose almost 10 percent to two-year highs last week on growing expectations of demand from manufacturers of batteries used to power electric vehicles. LME nickle slipped 2.1 percent to $12,655. LME copper closed 2.1 percent down at $6,826 a tonne, aluminium ended 1.8 percent lower at $2,132, zinc fell 2 percent to $3,166, lead lost 0.6 percent to $2,496 and tin closed 0.7 percent up at $19,580.

U.S. Treasuries
1. U.S. Bonds
U.S. Treasury yields fell on Tuesday, flattening the yield curve to a level not seen in a decade, as $24 billion worth of three-year government debt, the first leg of this week's $64 billion quarterly refunding, fetched average demand. The two-year yield was a tad higher at 1.629 percent, while the 10-year yield slipped 1 basis point at 2.307 percent. This still narrowed their yield spread to just over 67 basis points, which was the tightest since November 2007, Reuters data showed.

2. Chinese bonds
China's cash bonds kept rangebound in China's interbank bond market in the morning session on Tuesday, while Treasury bonds extended losses before the close of the morning session. The market remained subdued and cash bonds saw no direction with potential personnel and policy changes ahead of the release of macro data, traders said.

Stock Market
1. U.S. Equities
The Dow Jones Industrial Average eked out a fourth consecutive record high close on Tuesday, while the S&P 500 ended marginally lower after a disappointing profit forecast from Priceline and a drop in financials. The S&P 500 financial index led decliners with a 1.33 percent fall. The Dow Jones Industrial Average ended up 8.81 points or 0.04 percent at 23,557.23 after spending most of the day in negative territory. The S&P 500 dipped 0.02 percent to 2,590.64. The Nasdaq Composite slipped 18.65 points or 0.27 percent to 6,767.78.

2. Hong Kong Equities
Hong Kong stocks hit a decade-high on Tuesday, joining the global optimism that pushed Wall Street to another record overnight and Asian stocks to their highest in 10 years. Monday's anxiety stemming from Saudi Arabia's anti-corruption campaign evaporated, strengthening belief that the bull run in Chinese and Hong Kong equities markets will likely continue. The Hang Seng index rose 1.4 percent, to 28,994.34, the highest close since December, 2007. The China Enterprises Index gained 1.1 percent, to 11,645.53 points.

3. China Equities
The Shanghai Composite Index closed higher in higher volume on Tuesday, lifted by heavyweights such as cyclical and financial names. The index regained the ground of 3,400, up 25.40 or 0.75 percent to 3,143.57. The CSI 300 index ended up 0.83 percent to 4,054.25.