I. Yesterday's News
1. U.S. consumer spending increased modestly in November as household income failed to rise for the first time in nine months, suggesting the economy slowed in the fourth quarter after growing briskly in the prior period. The economy, however, remains on solid footing as other data on Thursday showed new orders for capital goods rising last month, indicating that some of the oil-related drag on business spending was fading. And while the number of Americans applying for unemployment aid hit a six-month high last week, it remained below a level that is associated with labor market strength. In another report on Thursday, the Commerce Department said the economy grew at a 3.5 percent clip in the third quarter instead of the previously reported 3.2 percent pace. That was the strongest growth rate since the third quarter of 2014. The dollar was flat against a basket of currencies. Prices for U.S. government bonds and stocks on Wall Street were trading lower in late trade.

2. The European Central Bank plans to keep debate about further stimulus closed until the second half of 2017, after the election in Germany where the bank's loose monetary policies are politically charged. Senior officials told Reuters that after years of crisis fighting - including philosophical clashes with Berlin - the ECB is conscious that its bond-buying programme is losing its impact and any major new moves could impact politics, leaving it exposed to criticism. As well as Germany, there are elections next year in the Netherlands, France and possibly Italy.

3. China may adjust its investment in U.S. Treasuries while reductions in Treasury holdings is a tactical move, foreign exchange regulatory official Li Hongyan told reporters on Thursday. China needs to take "counter-cyclical" steps to control large capital outflows, said Wang Chunying, spokeswoman for the State Administration of Foreign Exchange (SAFE). China's outbound direct investment has been too much and too fast this year, Wang said.

4. Japan's cabinet approved on Thursday a record $830 billion spending budget for fiscal 2017 that counts on low interest rates and a weak yen to limit borrowing, underscoring the challenge Tokyo faces in curbing the industrial world's heaviest debt burden. The 97.5 trillion yen ($830 billion) general-account budget for the fiscal year starting on April 1 marks an increase from 96.7 billion yen in this year's initial plan due to a rising social security bill to fund the cost of services for a fast-aging society.

5. New Zealand's economy surged ahead in the third quarter as consumers spent with abandon while homebuilding and tourism boomed, cementing expectations the country's central bank was done cutting interest rates. Official data on Thursday showed gross domestic product rose 1.1 percent. It was the fifth straight quarter of growth at 0.7 percent or more and took the annual pace of expansion to a rapid 3.5 percent. Much of the country's success was simply due to having more people. A record influx of migrants has lifted population growth to a blistering 2.1 percent -- almost three times that of the United States. More people means more spending on everything from education to health and an ever-rising demand for housing, which has heated home prices across the country.

II. Market Overview
FX
The dollar was little changed against a basket of currencies on Thursday, hovering below a 14-year high reached earlier this week. The dollar index, which measures the greenback against a group of six major currencies, was marginally higher at 103.08 but still below 103.65 it set on Tuesday, which was its highest since December 2002. The single currency was last up 0.1 percent against the dollar at $1.0429. The euro was up 0.1 percent at 122.67 yen. The dollar was flat at 117.57 yen after reaching 118.66 yen a week ago, which was its strongest level against the Japanese currency since early February.

Precious Metals
Gold prices eased on Thursday as the dollar advanced in choppy trade and on expectations that the U.S. Federal Reserve will further raise interest rates. Spot gold was down 0.3 pct at $1,128.6 per ounce, and most-active U.S. gold futures for February delivery settled down $2.5, or 0.22 percent, at $1,130.70 per ounce.
Silver was down 0.94 percent at $15.78 an ounce. Platinum dropped to $901.99 and palladium fell for the seventh straight session to $654.9 an ounce.

Commodities
1.Crude Oil
Oil prices rose in subdued trading on Thursday, supported by strong U.S. economic data and optimism that crude producers would abide by an agreement to limit output. U.S. West Texas Intermediate crude settled up 46 cents, or 0.9 percent, to $52.95 a barrel. Brent futures for February delivery settled up 59 cents to $55.05, or 1.1 percent.

2. Base Metals
Copper prices fell to one-month lows on Thursday as the generally higher dollar and a sharp drop in imports by top consumer China fueled worries about demand. Benchmark copper on the London Metal Exchange closed up 0.1 percent to $5,519 a tonne from an earlier session low at $5,419.5, its lowest since Nov. 18. Lead slid 2.7 percent to $2,124, tin gained 0.2 percent to $20,940 and nickel slipped 1.2 percent to $10,730 a tonne.

U.S. Treasuries
U.S. Treasury yields rose on Thursday after data showed improving economic growth, and as investors prepared for new Treasury supply next week. Benchmark 10-year notes were last down 3/32 in price to yield 2.55 percent, up from 2.54 percent late Wednesday.

Stock Market
1. U.S. Equities
U.S. stocks fell on Thursday, weighed down by weakness in retailers, as investors stepped back from a recent rally fueled by optimism that President-elect Donald Trump will invigorate economic growth. The Dow finished 23.08 points or 0.12 percent lower at 19,918.88 and the S&P 500 lost 4.22 points or 0.19 percent to end at 2,260.96. The Nasdaq Composite dropped 24.011 points or 0.44 percent to 5,447.422.

2. Hong Kong Equities
Hong Kong stocks fell on Thursday, dragged by declines in steel and coal price as well as weakness in mainland companies listed in the city. The Hang Seng index fell 0.8 percent, to 21,636.20, while the China Enterprises Index lost 1.4 percent, to 9,200.24 points. Nearly all sectors retreated at the close, with an index tracking energy shares the biggest decliner, down around 1.7 percent on Thursday, after commodity price tumbled.