I. Yesterday's News
1. President Barack Obama on Thursday ordered the expulsion of 35 Russian suspected spies and imposed sanctions on two Russian intelligence agencies over their involvement in hacking U.S. political groups in the 2016 presidential election. Allegations by U.S. intelligence agencies that Russian President Vladimir Putin personally directed efforts to intervene in the U.S. election process by hacking mostly Democrats have made relations even worse.

2. A drop in U.S. exports last month pushed the country's trade deficit in goods higher while the number of Americans filing for unemployment benefits fell last week in a positive sign for the labor market. The two reports released on Thursday suggested that when Donald Trump becomes America's president next month, the labor market will likely be at roughly full strength and international trade could be weighing on the economy.

3. In an initial estimate that does not include trade in services, the Commerce Department said the country exported $1.2 billion less in November than in October. Imports rose by $2.2 billion during the month. Separately, initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 265,000 for the week ended Dec. 24, the Labor Department said. It was the 95th straight week that claims were below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970.

4. Starting on Jan. 1, the number of currencies in the CFETS currency basket will be increased to 24 from 13, the China Foreign Exchange Trade System (CFETS) said on Thursday. The dollar's weight in the basket will be reduced to 0.224 percent from 0.264 percent, to reform the way it manages the yuan by making it more market-driven and transparent. The 11 currencies to be added include the South African rand, the Korean won, the United Arab Emirates Dirham, the Saudi Arabian Riyal, the Hungarian Forint, the Polish Zloty, the Danish Krone, the Swedish Krona, the Norwegian Krone, the Turkish Lira, and the Mexican peso. The weight of the United Arab Emirates Dirham and the Saudi Arabian Riyal will be 0.0187 and 0.0199 respectively.

5. China will take more measures to open up and attract foreign investment, state radio reported on Thursday, citing a cabinet meeting on Wednesday. The State Council, China's cabinet, said on Wednesday that it will further deepen its opening-up  policy, cut administrative trading cost, push forward pre-access national treatment + updated negative list offers, cut red tapes for approvals, and set up universal registered capital system for foreign investment.

II. Market Overview
FX
The U.S. dollar hit a 15-day low against the yen on Thursday as traders used the quiet holiday period to take profits on the dollar's recent gains, while a drop in U.S. Treasury yields on waning risk appetite reduced the greenback's appeal. The dollar was last down 0.5 percent against the yen at 116.65 yen. The euro was last up 0.71 percent against the dollar at $1.0481. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.59 percent at 102.690.

Precious Metals
Gold prices rose almost 2 percent on Thursday as U.S. bond yields declined on waning risk appetite, reducing the U.S. dollar's appeal against safe-haven currencies such as the Japanese yen. Spot gold hit $1,159.50 an ounce during the session, the highest since Dec. 14, and was up at $1,158.24. U.S. gold futures for February delivery ended the session up 1.5 percent at $1158.1 an ounce.

Commodities
1.Crude Oil
Oil futures dipped on Thursday after a surprise build in U.S. crude inventories reversed an advance in prices that had boosted the benchmarks to their highest levels since July last year. U.S. crude futures settled 29 cents, or 0.5 percent, lower at $53.77 a barrel while Brent crude fell 8 cents, or 0.1 percent, to $56.14 a barrel.

2. Base Metals
Copper prices were softer on Thursday alongside equities in thin holiday trade as markets fretted about the higher dollar and the potential for a liquidity crunch in top consumer China. Benchmark copper on the London Metal Exchange ended 1 percent down at $5,487 a tonne, though still up from last week's one-month low of $5,419.50.

U.S. Treasuries
U.S. Treasury yields fell across the curve and most hit two-week lows on Thursday as investors bought safe-haven government debt after a strong seven-year note auction on the last full trading day of the year. The 10-year note was last up 8/32 in price to yield 2.48 percent. Yields earlier fell to 2.46 percent, their lowest level since Dec. 14. Yields on 30-year Treasury bonds was up 2/32 in price to yield 3.08 percent.

Stock Market
1. U.S. Equities
Wall Street ended slightly lower on Thursday, held down by bank shares in quiet holiday trading as traders looked to position for the new year. The Dow Jones Industrial Average fell 13.9 points, or 0.07 percent, to 19,819.78, the S&P 500 lost 0.66 points, or 0.03 percent, to 2,249.26 and the Nasdaq Composite dropped 6.47 points, or 0.12 percent, to 5,432.09.

2. Hong Kong Equities
Hong Kong stocks edged up on Thursday, as strength in tech stocks outweighed the bearish hint from Wall Street, where stocks lost the most in two months overnight. The Hang Seng index rose 0.2 percent, to 21,790.91, while the China Enterprises Index gained 0.1 percent, to 9,312.76 points.