I. Yesterday's News
International News
1. The U.S. House of Representatives on Thursday narrowly approved (217-213) a bill to repeal Obamacare, handing Republican President Donald Trump a victory that could prove short-lived as the healthcare legislation heads into a likely tough battle in the Senate. No Democratic House members voted for the bill. The legislation, called the American Health Care Act, is by no means a sure thing in the Senate, where the Republicans hold a slender 52-48 majority in the 100-seat chamber and where only a few Republican defections could sink it.

2. Independent centrist candidate Emmanuel Macron appeared to cement his position as favourite for the French presidency on Thursday as the dust settled on a rancorous final televised debate with far-right rival Marine Le Pen. Three days before the final round of France's most important election in decades, the premium investors demand to hold French bonds over German ones reached its narrowest point in six months, reflecting perceptions that Le Pen, the markets' nightmare scenario as French president, had missed her last chance to unseat Macron. According to a snap poll, 63 percent of viewers found Macron the more convincing of the two candidates in Wednesday night's debate, reinforcing his status as favourite to move into the Elysee Palace.

3. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 238,000 for the week ended April 29, the Labor Department said. The decline unwound most of the prior two weeks' increases. The number of people still receiving benefits after an initial week of aid declined 23,000 to 1.96 million in the week ended April 22, the lowest level since April 2000. In another report, the Labor Department said productivity decreased at a 0.6 percent annualized rate in the first quarter, the weakest in a year. A separate report from global outplacement consultancy Challenger, Gray & Christmas on Thursday showed U.S.-based employers announced 36,602 job cuts in April, down 15 percent from March.

4. OPEC and non-OPEC oil producers look likely to extend their agreement to limit supplies beyond its June expiry to help clear a glut, three OPEC delegates said on Thursday, downplaying the chance of additional steps such as a bigger cut. However, OPEC officials generally believe the agreement is helping to bring the market closer to balance between supply and demand and that it should be extended into the second half of the year with the same numbers.

5. Euro zone businesses raced into the second quarter, increasing activity at the fastest rate in six years in April, according to a survey on Thursday which suggested the bloc's economic recovery is broadly based and sustainable. Markit's final Composite Purchasing Managers' Index (PMI) rose to a six-year high of 56.8 in April from March's 56.4, large in line with preliminary figure of 56.7. Europe's largest economy is enjoying solid growth as although activity in Germany's services sector fell slightly it remained strong in April. UK services activity unexpectedly rose to a four-month high.

6. The governor of Australia's central bank warned borrowers on Thursday that interest rates would not remain at current record lows forever, as household debt escalates alongside skyrocketing property prices. Households burdened by heavy mortgage debt have a reduced appetite for consumption, making the transmission of monetary policy weaker, Reserve Bank of Australia (RBA) Governor Philip Lowe told a lunch in Brisbane. Lowe pointed out that households should be prepared for an increase in interest rates in Australia "at some point."

Domestic News
7. In a notice released Wednesday, the Ministry of Finance (MOF) asked provincial authorities to start self-examining their financing practices as soon as possible and to rectify all irregularities by the end of July, with progress to be tracked by MOF local supervisors. China is moving to correct irregular behavior in the fundraising of local governments by public-private partnerships.

8.China's Caixin Purchasing Managers' index (PMI) fell across the board with the new service slipping to a one-year low. The findings echoed those in official manufacturing and service sector data, reinforcing views that China's economic growth is starting to moderate, dragging the PMI to a trough in 10 months.

9. Under the background of deleveraging, marketized debt-to-equity swap is accelerating now. It is learnt by China Securities Journal that the debt-to-equity swap agreements involve 767.2 billion yuan, but only the agreements with value of 59.2 billion yuan have been actually implemented as of April 19. Regulators are further detailing measures related to marketized and legalized debt-to-equity swap so as to support supply-side reform and help enterprises lower leverage.

10. China macroprudential management should set up a centralized cross-border capital movement monitoring and analysis platform, tighten regulations on systematically important financial institutions (SIFIs), further develop existing policy tools, and strengthen supervision of cross-departmental collaboration and information sharing, wrote Zheng Wei, deputy head of the State Administration of Foreign Exchange. Micro-market regulation should include intensified authenticity and compliance checks for all forex transactions and a crackdown on illegal forex market activities, she said.

II. Market Overview
FX
1. Global Market
The euro reached a roughly six-month high against the U.S. dollar on Thursday on greater certainty centrist Emmanuel Macron will win France's presidential election, along with expectations of further European Central Bank stimulus reduction. The euro rose to $1.0984, its highest since early November 2016. The dollar fell against the yen to as low as 112.33 yen after nearly touching a seven-week high of 113.04 yen. Commodity-linked currencies such as the Australian and New Zealand dollars fell as oil prices tumbled. The Aussie dropped to a nearly four-month bottom of $0.7383, while the kiwi hit its lowest since June 2016, $0.6840. The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.5 percent at 98.752.

2. Home Market
China's yuan slipped against the dollar in the morning session as the dollar index rose after the Federal Reserve's policy meeting, sending the midpoint rates to a three-week low. Regulator's intervention lifted midpoint rates well above market expectations, signaling China's determination to steady exchange rates. Forex prices are expected to remain stable in near term.

Precious Metals
Gold prices fell to the lowest in more than six weeks on Thursday, on expectations of further U.S. interest rate increases this year and receding political uncertainty in Europe. Spot gold was down at $1,227.94 an ounce after touching $1,225.20, the lowest since March 17. U.S. gold futures settled down 1.6 percent at $1,228.60. Silver closed at $16.28, having hit a four-month low of $16.17. Platinum ended at $899.00, after touching $889.10, its lowest since December.

Commodities
1.Crude Oil
Oil prices plunged to five-month lows on Thursday amid record trading volume in Brent crude, as OPEC and other producers appeared to rule out deeper supply cuts to reduce the world's persistent glut of crude. U.S. crude ended the session 4.81 percent lower at $45.52 per barrel after falling as much as 5.29 percent to an intraday bottom of $45.29, the lowest since Nov. 29. Brent crude settled at $48.38, or 4.75 percent lower, after tumbling as much as 5.17 percent during the session.

2.Base Metals
Copper fell to five-months lows on Thursday, posting its biggest two-day loss since July 2015, on rising inventories and worries over cooling demand. Inventories in London Metal Exchange (LME) warehouses rose nearly 33,000 tonnes on Wednesday, exchange data showed, bringing this week's increase to 64,000 tonnes, or 25 percent. LME copper closed 1 percent down at $5,543 a tonne, having touched $5,494, its lowest since Jan. 4.

U.S. Treasuries
1. U.S. bonds
U.S. Treasury yields rose on Thursday after strong labor data reinforced expectations the Federal Reserve was likely to raise interest rates again in June, and as investors waited on Friday's highly anticipated jobs report for April. Futures traders are pricing in a 79 percent chance of a June rate hike, up from 71 percent before the Fed statement, according to the CME Group's FedWatch Tool. Benchmark 10-year notes fell 13/32 in price to yield 2.36 percent, their highest since April 10.

Stock Market
1. U.S. Equities
Wall Street ended flat on Thursday as a steep fall for the energy sector countered some solid earnings reports, with major stock indexes closing little changed after the U.S. House of Representatives passed a healthcare overhaul. The energy sector dropped 1.9 percent, easily the worst performing group. Exxon Mobil's 1.3-percent decline and Chevron's 1.8-percent drop weighed on the S&P. The Dow Jones Industrial Average fell 6.43 points, or 0.03 percent, to 20,951.47, the S&P 500 gained 1.39 points, or 0.06 percent, to 2,389.52 and the Nasdaq Composite added 2.787 points, or 0.05 percent, to 6,075.337.

2. Hong Kong Equities
Hong Kong stocks slipped slightly on Thursday, as a jump in index heavyweight HSBC Holdings largely counterbalanced any bearish sentiment stemming from the U.S. Federal Reserve's hawkish policy statement. The Hang Seng index fell 0.1 percent, to 24,683.88, while the China Enterprises Index lost 0.8 percent, to 10,088.02 points.

3. China Equities
The Shanghai Composite Index fell to a 3-1/2-month low, extending losses to the third consecutive day. The early rebound was reversed due to lack of confidence. In the afternoon session, the decline accelerated led by cyclical sector including coals and nonferrous metals in wake of tumbling commodity prices.