I. Yesterday's News
1. Japan's economic growth handily beat expectations in the July-September period, expanding for a third straight quarter as exports recovered, but weak domestic activity cast doubt on hopes for a sustainable economic recovery. The world's third-largest economy expanded by an annualised 2.2 percent in the third quarter, faster than the 0.9 percent increase markets had expected, following a 0.7 percent increase in April-June, Cabinet Office data showed. External demand was the biggest contribution since April-June 2014. Exports grew 2.0 percent, the fastest gain in a year.

2. The case for U.S. interest rate increases at the Federal Reserve will grow if the federal government uses tax cuts or increased spending to stimulate the economy, Richmond Federal Reserve President Jeffrey Lacker said on Monday. "Obviously the election seems to have shifted expectations" on fiscal policy, Lacker told reporters, adding it was too soon to know if Washington would crimp the central bank's independence following Republican Donald Trump's victory in the Nov. 8 presidential election. Dallas Federal Reserve Bank President Robert Kaplan on Monday said he is sticking to his forecast for 2 percent U.S. economic growth next year. If a Trump administration delivers fiscal and other policies as investors are betting he will, that would give the Fed some room to maneuver, Kaplan said. But so far, the rise in yields that those expectations have driven do not affect his own expectations for Fed policy or for the economy.

3. Financial markets have been pricing in more economic growth since Donald Trump's U.S. election win last week, but U.S. protectionism and domestic political risks could hurt Europe, ECB vice-president Vitor Constancio said on Monday. "We should be cautious in drawing hasty, positive conclusions from those market developments because they may not necessarily indicate that the world economy will have an accelerating recovery with higher growth," the European Central Bank policymaker said. The European Central Bank does not need to react to recent sharp increase in sovereign bond yields as post-election U.S. politics justify the steepening of the yield curve and this also benefits banks, he said. Constancio said that he was not any more concerned about low core inflation than earlier, but would like to see a turning point, reflecting productivity growth and better headline inflation.

4. Euro zone industrial production fell by less than expected in September, driven down mostly by a steep drop in the output of durable goods, such as cars or fridges, the European Union statistics office said on Monday. A Reuters poll of economists had forecast a steeper monthly fall of 1.0 percent, and a more moderate 1.0 percent increase from a year earlier.

II. Market Overview
FX
The dollar rose to an 11-month high against a basket of major currencies on Monday, in step with a jump in U.S. bond yields as traders bet fiscal and trade policies under a Donald Trump administration would stoke inflation. China's yuan fell to its weakest against the dollar since before the launch of its offshore market in 2010. The dollar index was 1.1 percent higher at 100.10 after touching 100.22 earlier on Monday, its highest since Dec. 3, 2015. The euro shed 1.1 percent at $1.073 against the greenback, while the dollar was up 1.8 percent at 108.43 yen.

Precious Metals
Gold fell for the third straight session on Monday, reaching a 5-1/2-month low as the dollar and Treasury yields strengthened on expectations that President-elect Donald Trump will boost U.S. Spending. Spot gold hit its lowest since June 3 at $1,211.08 an ounce and was down at $1,219.86 an ounce. U.S. gold futures settled down 0.2 percent at $1,221.70.

Commodities
1.Crude Oil
Oil prices were largely steady on Monday, rebounding from three-month lows, on a report saying that OPEC members were seeking to resolve their differences on a deal to cut production ahead of a meeting later this month. Brent crude futures settled at $44.43 per barrel, down 0.72 percent, after falling to as low as $43.57. U.S. crude ended the session down 0.2 percent at $43.32, after hitting a low of $42.20. Both benchmarks' session lows were the weakest since Aug. 11.

2. Base Metals
Copper built on last week's double-digit percentage gains on Monday after infrastructure spending in top metals consumer China came in ahead of expectations though some analysts said the rally looked overdone. Benchmark copper closed 0.4 percent higher at $5,569 a tonne. Aluminum fell 0.6 percent to $1,735 per tonne. Tin slipped 2.6 percent to $20,830 a tonne.

U.S. Treasuries
The bond market sell-off resumed on Monday on the heels of the worst week for U.S. Treasuries in more than seven years, on growing worries that inflation will resurge under the policies of President-elect Donald Trump. The yield on the 30-year Treasury bond, the security most sensitive to inflation expectations, shot above 3 percent for the first time since January. The gap between the yields on 10-year and 2-year notes rose from 1.21 percent at the end of last week to 1.26 percent, its widest since December. Yields on 30-year bonds rose to a high of 3.067 percent, a peak not touched since December. Benchmark 10-year notes saw their yields rise to 2.302, also the highest since December.

Stock Market
1. U.S. Equities
U.S. stocks closed little changed on Monday after rising dramatically the week before and a decline in the technology sector offset a steep rise in financial stocks as investors bet on higher interest rates. The Dow Jones industrial average closed up 21.03 points, or 0.11 percent, to 18,868.69, the S&P 500 lost 0.25 points, or 0.01 percent, to 2,164.2 and the Nasdaq Composite dropped 18.72 points, or 0.36 percent, to 5,218.40.

2. Hong Kong Equities
The Hong Kong stock market touched its lowest point since Aug. 5 on Monday, as a stronger U.S. dollar continue to take a toll after Donald Trump's victory in the U.S. presidential election sent Treasury yields soaring. The Hang Seng index fell 1.4 percent, to 22,222.22, while the China Enterprises Index lost 1.0 percent, to 9,342.87 points.