I. Yesterday's News
1. U.S. home prices rose 5.1 percent in the year to August as home buyers competed for fewer properties, helped by low mortgage interest rates, some wage growth and low unemployment. Consumers' perceptions of both current conditions and the six-month outlook dimmed in October, with the U.S. Conference Board's confidence index slipping to 98.6 in October, down from 103.5 in September.

2.The European Central Bank is aware of the growing costs to the financial sector of its ultra-loose monetary policy and would rather not have to keep negative interest rates for too long, ECB President Mario Draghi said on Tuesday. "We would certainly prefer not to have to keep interest rates at such low levels for an excessively long time, since the unwelcome side-effects may accumulate over time," Draghi told an event in Berlin. Speaking in Berlin, Draghi defended the ECB's policy of aggressive bond buying and ultra-low rates. But he also acknowledged complaints by banks, particularly in Germany, that low rates are eating into their profits. Speaking almost simultaneously at a separate event in Berlin, German Finance Minister Wolfgang Schaeuble said there was a growing international consensus that monetary policy had reached its limits. Schaeuble also said he believed there was an excess of liquidity and excess of indebtedness internationally.

3. Bank of England Governor Mark Carney said on Tuesday that there were limits to the central bank's ability to ignore the effect of sterling's slide on inflation, as policymakers consider whether to cut interest rates next week. Carney also told lawmakers that political criticism would not influence his decision on whether to extend his time at the BoE, but warned that any interference with its independence would hurt the currency and push up government borrowing costs. "There are limits to the willingness of the Monetary Policy Committee to look through an overshoot of inflation," he said, describing the depreciation of sterling in recent weeks as "fairly substantial".

4. Japan's government raised its assessment on industrial output for the first time in nine months as it gave a less cautious view on business sentiment, although the broad tenet of Tokyo's view highlighted a still-fragile economic recovery. The government stuck to its overall assessment in its monthly economic report for October, issued on Tuesday, which described the economy as being in moderate recovery while still showing weakness. The assessment on industrial production marked an upgrade from last month, when it was said to be flat. At the same time, the government raised its view on business sentiment for a second straight month, saying it is almost flat though cautiousness was seen in some areas.

II. Market Overview
FX
The U.S. dollar slipped from a nearly eight-month high against the euro and a roughly three-month peak against the yen on Tuesday after comments from Bank of England (BoE) Governor Mark Carney cast doubt on expectations for more monetary stimulus in Europe. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.07 percent at 98.687 after touching a nearly nine-month high of 99.119 earlier. The euro was last up 0.09 percent against the dollar at $1.0890, recovering from a roughly 0.3 percent loss earlier in the session that had taken the currency to a nearly eight-month low of $1.0851. The dollar was last flat against the yen at 104.17 yen after hitting a roughly three-month high of 104.87 yen in morning U.S. trading. The dollar remained up slightly against the Swiss franc at 0.9943 franc, but off a nearly eight-month high of 0.9998 touched earlier. Sterling was last down just 0.35 percent, paring losses after falling more than 1 percent to a more than two-week low of $1.2082 earlier.

Precious Metals
Gold rose to an almost three-week high on Tuesday as the U.S. dollar retreated from multi-month highs and physical demand rose before India's late-October festival season. Spot gold was up at $1,273.85 an ounce, after rising to $1276.67, the highest since Oct. 5. U.S. gold futures settled up 0.8 percent at $1,273.60 an ounce.

Commodities
1.Crude Oil
Oil settled down on Tuesday, then U.S. crude slid further below $50 a barrel in post-settlement trade after an industry group reported that U.S. oil inventories grew nearly three times as much as forecast. Oil prices were also depressed by producers' verbal jockeying over planned output cuts by the Organization of the Petroleum Exporting Countries. Iraq, OPEC's second largest producer, reiterated on Wednesday its resistance to contributing to the cuts while data showed it had higher output for October. Brent, the international benchmark for crude, settled down 67 cents, or 1.3 percent, at $50.79. In post-settlement trade, it sank as much as $1.24, or 2.4 percent, to $50.22. U.S. West Texas Intermediate (WTI) crude settled down 56 cents, or 1.1 percent, at $49.96. Post settlement, it fell further to $49.27.

2. Base Metals
Copper prices rose to their highest in more than a week on Tuesday as the dollar slipped and talk of further fiscal stimulus by top consumer China fuelled buying of commodities. Benchmark copper on the London Metal Exchange ended up 2.1 percent at $4,735 a tonne from an earlier $4,754.5, its highest since Oct. 13.
Among other metals, zinc was up 2.4 percent at $2,367 from an earlier three-week high of $2,376. Aluminium closed up 2.4 percent at $1,669 a tonne, lead gained 1.4 percent to $2,052, nickel rose 2.2 percent to $10,225 and tin added 2.2 percent to $20,320.

U.S. Treasuries
U.S. long-dated Treasury yields slipped on Tuesday after data showed a decline in U.S. consumer confidence this month, although the outlook on yields remained intact as investors see the Federal Reserve raising interest rates in December. In late trading, U.S. 10-year Treasury notes were up 1/32 in price, yielding 1.756 percent. Earlier in the session, 10-year yields hit a one-week peak at 1.788 percent. U.S. 30-year bonds were 9/32 higher in price to yield 2.501 percent, down from a one-week peak of 2.541 percent hit on Monday. U.S. two-year note yields were at 0.856 percent. Earlier, two-year yields hit a two-week high of 0.86 percent.

Stock Market
1. U.S. Equities
U.S. stocks slipped from two-week highs on Tuesday as results and forecasts from companies in sectors including housing and consumer products failed to live up to expectations. Apple, the largest U.S. company by market capitalization, posted after the bell earning results. Its shares plunged after early gains, and closed 2.8 percent lower at $114.99. The Dow Jones industrial average fell 53.76 points, or 0.3 percent, to 18,169.27, the S&P 500 lost 8.17 points, or 0.38 percent, to 2,143.16 and the Nasdaq Composite dropped 26.43 points, or 0.5 percent, to 5,283.40.

2. Hong Kong Equities
Hong Kong shares ended slightly lower on Tuesday after mainland markets put up a lacklustre performance and as investors were cautious about the increasing possibility of a U.S. interest rate increase in December. The Hang Seng index fell 0.2 percent, to 23,565.11, while the China Enterprises Index also lost 0.2 percent, to 9,837.70 points.