I. Yesterday’s News
International News

1. As reported by the Commerce Department’s Bureau of Economic Analysis, U.S. gross domestic product grew at a 4.1 percent pace in the second quarter, matching a Reuters poll of economists. The PCE price index increased 1.8 percent, compared with an increase of 2.0 percent in economists’ forecast. Excluding food and energy prices, the core PCE price index increased 2.0 percent, compared with economists’ forecast of 2.2 percent. The preliminary sales rose 5.1 percent, beating market consensus of an increase of 3.7 percent. Consumer spending rebounded to a 4 percent annual growth rate. GDP deflator index added 3.2 percent, better than the forecast of a 2.3 percent growth.

2. Euro zone inflation rose faster than expected, a survey by the European Central Bank showed, supporting the bank’s move to gradually move away from its ultra low rate policy. Euro zone inflation was forecast to rise 1.7 percent this year and next, beating previous forecast of 1.5 percent and 1.6 percent in 2020, according to a poll on 56 economists, a key indicator in deciding ECB’s policy.

3. Tokyo's core consumer prices rose 0.8 percent in July from a year earlier, accelerating for a second straight month, slightly higher than a median market forecast for a 0.7 percent gain. Analysts say several technical factors, such as a slight sample change for rent, pushed up Tokyo inflation but will likely not give much of a boost to nationwide prices. The data for Tokyo heightens the chance the central bank will concede next week that inflation could fall short of its target for as long as three more years.

4. BP Plc has agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion, expanding the British oil major's footprint in some of the nation's most productive oil basins in its biggest deal in nearly 20 years.

5. French carmaker Renault achieved record profitability in the first half of the year, but currency and raw material costs weighed on its bottom line. Boosted by higher global deliveries announced earlier this month, Renault's operating profit rose 5.2 percent to 1.914 billion euros ($2.23 billion) for an all-time high profit margin of 6.4 percent, up from 6.2 percent. Revenue rose a modest 1.4 percent year-on-year to 29.957 billion euros, the carmaker said on Friday.

Domestic News

6. China's securities regulator has amended rules related to the criteria for delisting companies listed on its stock exchanges. In the amended rules, the China Securities and Regulatory Commission said stock exchanges should be prepared to suspend or delist companies involved in fraud and in violations in major information disclosure. Companies whose activities harm national security, public safety or the public interest could also be suspended or delisted, the regulator said.

7. China’s central bank on Friday issued a notice to increase oversight over cross-border financial network and information services. The notice said that any overseas financial network and information service providers are not allowed to build financial network for transmission of financial information, but they can give authorization to their representative agencies in China to fulfill obligations on reporting and information submitting.

8. ZTE Corp revised its first-quarter results to a net loss on Friday, after China's second-biggest telecommunications equipment maker took into account the impact of a crippling U.S. supplier ban that has now been lifted. ZTE said net loss for the three months through March was 5.4 billion yuan ($790.62 million), compared to a net profit of 1.2 billion yuan a year earlier. Revenue rose 6.9 percent on year to 27.5 billion yuan.

9. Chinese and U.S. envoys presented radically differing visions of Beijing's economic model at the World Trade Organization on Thursday, a choice between "the world's most protectionist economy" and a growth story that has benefited all countries.

II. Market Overview
FX
1. Global Market

The dollar slipped against a basket of currencies on Friday as data showing the U.S. economy rang up its strongest quarter in nearly four years failed to erase worries that trade frictions would be a drag in the second half of 2018. The euro stabilized following its biggest one-day loss in a month in reaction to the European Central Bank on Thursday reaffirming its plan to slowly end its accommodative monetary policy. An index that tracks the dollar versus the euro, yen, sterling and three other currencies was down 0.09 percent at 94.662, paring its weekly gain to 0.2 percent. The euro was up 0.14 percent at $1.16595, while the greenback was down 0.2 percent at 111.00 yen, according to EBS. The single currency steadied after falling more than 0.7 percent on Thursday. The yen firmed against the euro and dollar. China's yuan was heading for its longest weekly losing streak since November 2015. It fell to a 13-month low at 6.8369 per dollar.

2. Home Market

China's yuan pared some losses after falling sharply in the morning session, dragged lower by the central bank's 280 bps cut in midpoint rate. The yuan opened lower and tumbled over 400 bps to 6.8231 per dollar before paring some losses, as the euro slipped against the greenback due to the ECB’s decision on interest rates. Consolidation is quite likely in the near term.

Precious Metals

Gold inched higher on Friday as the U.S. dollar slid lower after strong U.S. economic growth data while concern remains about trade tensions between the United States and Europe. Spot gold edged up 0.1 percent to $1,223.46 an ounce, having hit a one-week low of $1,216.93, and was on track for its third consecutive weekly decline, of about 0.5 percent. U.S. gold futures for August delivery settled down $2.70, or 0.2 percent, at $1,223 per ounce.

Commodities
1.Crude Oil

Oil prices fell on Friday, weighed down by a drop in the U.S. equities market, but Brent still marked a weekly increase, supported by easing trade tensions and a temporary shutdown by Saudi Arabia of a key crude oil shipping lane. Brent crude futures fell 25 cents to settle at $74.29 a barrel, but notched a 1.8 percent weekly increase, its first increase in four weeks. U.S. West Texas Intermediate (WTI) crude futures fell 92 cents to settle at $68.69 a barrel, and marked a fourth week of declines, falling about 2.4 percent.

2.Base Metals

Copper was set for its first weekly rise in seven weeks after a deal between the European Union and the United States reduced fears that new trade barriers would erode demand for metals. Benchmark copper on the London Metal Exchange closed up 0.1 percent at $6,297 a tonne and was 2.4 percent higher this week.

U.S. Treasuries
1. U.S. Bonds

U.S. Treasury yields retreated from six-week highs on Friday after data showed the U.S. economy grew at its fastest pace in nearly four years, but came in below high expectations for the number. Benchmark 10-year notes gained 4/32 in price to yield 2.962 percent, down from a high of 2.988 percent reached in overnight trading, which was the highest since June 13. The yield curve between 2-year and 10-year notes flattened to 28 basis points, from 30 basis points before the data.

2. Chinese bonds

Chinese interest rates bond in interbank market remained robust on Friday as trade tensions between the United States and Europe eased, and pressure on China’s economy sustained. Yields of of the longer-dated bonds fell for the second consecutive day, but at a slower pace compared with the mid- and shorter-dated bonds. While, credit bonds remained steady.

Stock Market
1. U.S. Equities

Wall Street's major indexes fell on Friday as weak earnings reports from major technology companies led to a big drop for the sector. The Dow Jones Industrial Average fell 76.01 points, or 0.3 percent, to 25,451.06, the S&P 500 lost 18.62 points, or 0.66 percent, to 2,818.82 and the Nasdaq Composite dropped 114.77 points, or 1.46 percent, to 7,737.42. The Nasdaq exceeded Thursday's losses to register once again its biggest daily percentage drop in a month. For the week, the Nasdaq shed 1.06 percent, but the S&P rose 0.61 percent. The Dow, cushioned by promising developments in trade relations between the United States and the European Union earlier this week, added 1.57 percent.

2. Hong Kong Equities

Hong Hong stocks ended flat on Friday, as expectations of more stimulus from Beijing offset worries over a China economic slowdown as trade frictions with the United States intensify. The Hang Seng index rose 0.08 percent, to 28,804.28, while the China Enterprises Index gained 0.24 percent, to 11,047.42 points. China plans to put more money into infrastructure projects and ease borrowing curbs on local governments to help soften the blow to the economy from the Sino-U.S. trade war, policy sources told Reuters.

3. China Equities

China stocks ended down for the third consecutive day on Friday, dampened by infrastructure as investors were cautious amid concerns over the Sino-U.S. trade friction. Market remained weak after policy stimulus faded.