I. Yesterday's News
1. U.S. retail sales rose more than expected in October as households bought motor vehicles and a range of other goods, pointing to sustained economic strength that could allow the Federal Reserve to raise interest rates next month. The Commerce Department said on Tuesday retail sales increased 0.8 percent last month, also boosted by demand for building materials, likely as households cleaned up and made repairs in the wake of Hurricane Matthew. Adding to the report's strong tone, September retail sales were revised up to show a 1.0 percent increase instead of the previously reported 0.6 percent rise. The combined September and October sales gain was the largest two-month rise since early 2014. Sales were up 4.3 percent from a year ago.

2. Only "significant negative news" could derail the Federal Reserve's high expectations for raising U.S. interest rates next month, Boston Fed President Eric Rosengren said on Tuesday. Rosengren's speech, among the first by Fed officials since the U.S. election, appeared to reinforce market expectations for a mid-December hike. The Federal Reserve would hike interest rates more aggressively than planned if the newly elected U.S. government significantly stimulates the economy, he said. Donald Trump's election already may be pushing up interest rates and tightening financial markets, something the Federal Reserve will have to monitor as it decides how quickly to tighten monetary policy, Fed Governor Daniel Tarullo said on Tuesday. The Fed will not necessarily have to switch gears merely on the anticipation that a Trump administration will mount a major infrastructure spending program that increases deficits and possibly inflation, he said.

3. Euro zone banks may be more resilient than before Europe's debt crisis but poor profitability raises the threat that lenders take on too much risk in search for profit, European Central Bank supervisor Sabine Lautenschlaeger said on Tuesday. "An excessive search for yield could easily lead to new troubles for the banks themselves and the financial system as a whole," she said.

4. German economic growth slowed more than expected in the third quarter of 2016 as weaker exports put the brakes on overall activity in Europe's largest economy, preliminary data showed on Tuesday. The German economy grew by 0.2 percent on the quarter between July and September, the Federal Statistics Office said. That was lower than the consensus forecast in a Reuters poll for 0.3 percent growth. "Positive impulses on the quarter came mainly from domestic demand. Both household and state spending managed to increase further," the office said. Unadjusted data showed the economy expanded by 1.5 percent on the year, lower than the consensus forecast in a Reuters poll for 1.8 percent growth.

II. Market Overview
FX
The dollar rose on Tuesday to an 11-month high against a basket of currencies as a surprisingly large gain in October U.S. retail sales lifted bond yields to 10-month peaks and supported the outlook for an interest rate increase next month. The dollar index, which measures the greenback against six major currencies, was up 0.1 percent at 100.22. The euro, which hit an 11-month low of $1.0709 on Monday, rebounded to $1.0816 before easing to $1.0719, down 0.2 percent on the day. The dollar was up 0.8 percent at 109.26 yen. The onshore Chinese yuan fell to its weakest level in nearly eight years, breaking through 6.85 per dollar.

Precious Metals
Gold edged higher on Tuesday, snapping a three-session losing streak, on uncertainty over the economic policies of U.S. President-elect Donald Trump. Spot gold was up at $1,227.98 an ounce. U.S. gold futures settled up 0.2 percent at $1,224.50.

Commodities
1.Crude Oil
Oil prices jumped 6 percent on Tuesday, with U.S. crude notching its biggest daily percentage gain in seven months, on renewed expectations that OPEC will agree later this month to reduce a global supply glut. U.S. crude ended the session $2.49 higher at $45.81 per barrel, a 5.8 percent gain, its biggest daily percentage increase since early April. Brent futures settled at $46.95 a barrel, up $2.52, or 5.7 percent, its biggest percentage gain since Sept. 28.

2. Base Metals
Copper prices fell on Tuesday, as the dollar steadied around 11-month highs and traders took profits made after a week-long rally fuelled by Donald Trump's U.S. election victory. Three-month LME copper fell 3.2 percent to a one-week low of $5,360 a tonne and closed 0.9 percent lower at $5,520. The most-traded copper contract on the Shanghai Futures Exchange settled 1.29 percent down at 44,360 yuan a tonne.

U.S. Treasuries
U.S. 30-year Treasury bond prices rose on Tuesday, after falling five straight sessions as investors took a breather selling government debt in the wake of a higher inflation outlook under the administration of President-elect Donald Trump. In late trading, U.S. 30-year bond prices rose 9/32 in price, to yield 2.968 percent. U.S. 10-year Treasury note prices were down 4/32, yielding 2.238 percent. U.S. two-year note yields, meanwhile, were at 1.004 percent.

Stock Market
1. U.S. Equities
U.S. stocks rose on Tuesday, with the Dow registering its fourth consecutive record high close as tech stocks rebounded from a post-election battering and energy stocks were boosted by a sharp rise in oil prices. The Dow Jones industrial average rose 54.37 points, or 0.29 percent, to 18,923.06, the S&P 500 gained 16.19 points, or 0.75 percent, to 2,180.39 and the Nasdaq Composite added 57.23 points, or 1.1 percent, to 5,275.62.

2. Hong Kong Equities
Hong Kong stocks rebounded on Tuesday, recovering from a nearly 3-1/2-month closing low the previous day, as recent sharp gains in U.S. Treasury yields appeared to level off. The benchmark Hang Seng index ended up 0.5 percent, to 22,323.91, while the Hong Kong China Enterprises Index gained 0.6 percent, to 9,398.10 points.