I. Yesterday's News
1. Bank of England Governor Mark Carney said on Monday he will stay in his job for an extra year until the end of June 2019 to help smooth Britain's departure from the European Union, but he will depart two years short of a full term. Carney, who has come under heavy criticism from pro-Brexit politicians for warning before June's referendum of the economic risks of voting to leave the EU, had the option to stay at the Bank until 2021. But the Canadian decided against serving the full eight years available to him. "This should help contribute to securing an orderly transition to the UK's new relationship with Europe," he said. Sterling hit its highest level on Monday at $1.2240 on the news of Carney's extension.

2. Investors in Asia bought the Japanese yen, sold South Korean stocks and stayed away from volatile assets on Monday, reacting to opinion polls showing Democratic candidate Hillary Clinton's lead over her Republican rival Donald Trump narrowing further in the U.S. presidential election. The subtle shift in trading positions came after Friday's unexpected revelation that Federal Bureau of Investigation Director James Comey had written to the U.S. Congress informing it that the agency is again reviewing emails related to the private server Clinton used when she was secretary of state. Clinton's lead over Trump had been narrowing even before the email controversy resurfaced. Investors further pared their bets on a Clinton win and priced for more volatility.

3. The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.3 percent quarter-on-quarter in the July-September period. In year-on-year terms, the euro zone economy expanded 1.6 percent, in line with expectations of economists polled by Reuters. Consumer prices rose 0.5 percent year-on-year in October, in line with market consensus.

4. German retail sales fell the most in two years in September, data showed on Monday, dampening hopes that private consumption will continue to support growth in Europe's biggest economy. Retail sales unexpectedly fell by 1.4 percent on the month in real terms. This confounded a forecast in a Reuters poll for a 0.2 percent rise. A breakdown of the data suggested that the fall was mainly due to an unusually warm September, which dampened sales of winter clothing and footwear.

5. Japan's top three shippers said they will integrate their container shipping operations to create the world's sixth-largest fleet. The Japanese joint venture to be owned 38 percent by Nippon Yusen and 31 percent each by Mitsui OSK and Kawasaki Kisen, will be formed on July 1, 2017 and begin operations in April 2018. It is expected to create annual cost benefits of about 110 billion yen ($1.05 billion). Shares in the three Japanese ocean freight firms jumped almost 10 percent on the news.

6. Japan's industrial output stalled in September in a worrying sign that the economy, already struggling to mount a sure-footed recovery, may be losing some momentum due to weak consumer spending and exports. Separate data showed retail sales fell more than expected in September from a year ago, further evidence that private consumption remains a drag on growth. Industrial output was unchanged in September from the previous month. That compares with the median estimate in a Reuters poll of a 1.0 percent increase. Retail sales fell 1.9 percent in September from a year earlier, slightly more than a median market forecast for a 1.8 percent annual decline.

II. Market Overview
FX
The U.S. dollar surrendered gains to trade little changed against a basket of major currencies on Monday on renewed concerns about how an FBI probe into Hillary Clinton's use of a private email server might impact on the U.S. presidential election. Sterling rose on clarity after Bank of England Governor Mark Carney said he would stay in his job for an extra year, until the end of June 2019. The dollar index, which measures the greenback against a basket of six major currencies, was last mostly flat at 98.373. The index was set to gain about 3 percent for the month, putting it on track for its best performance in just under a year. The euro, which was last roughly flat against the dollar, at $1.0978, was set to lose about 2.3 percent in October to post its worst month in five. The dollar was up 0.1 percent against the yen at 104.84 yen, and set to gain 3.5 percent against the Japanese currency in October to mark its best month in five. Sterling was up 0.4 percent against the greenback at $1.2238

Precious Metals
Gold steadied on Monday, coming off lows as the dollar pared gains, though concerns over the outlook for the U.S. election and Federal Reserve policy kept the metal pinned near the previous session's highest level in nearly four weeks. Spot gold was up at $1,277.28 an ounce and on track to close October down 3 percent. U.S. gold futures for December delivery settled down 0.3 percent at $1,273.10.

Commodities
1.Crude Oil
Oil prices settled at one-month lows on Monday after dropping over 3 percent on doubts about OPEC's ability to implement its planned production cuts, with the market further weighed by expectations that the cartel had record output in October. Brent's front-month contract, which expires after Monday's session, was down $1.41, or 2.8 percent, at $48.30 a barrel. The more active next-month Brent contracts were down $2.03, or 4 percent, at $48.65 a barrel. U.S. West Texas Intermediate (WTI) futures were trading down $1.84, or 3.8 percent, at $46.86 a barrel.

2. Base Metals
Zinc rallied to its highest in five years on Monday, lifted by expectations that availability of the metal would remain tight after Glencore said it had shuttered one of its Australian mines. The benchmark zinc contract on the London Metal Exchange was untraded at the close, but was last bid at $2,457.50, up 2.5 percent. Earlier it touched its highest since August 2011 at $2,479.50. LME aluminium closed up 1 percent at $1,735 a tonne, after earlier hitting its highest since July last year at $1,737. Copper ended the day up 0.2 percent at $4,852. Earlier it hit a three-week high at $4,878.

U.S. Treasuries
Benchmark U.S. Treasuries ended their worst month in almost two years on a firm note on Monday, after falling expectations of central bank accommodation sent sovereign debt yields higher globally this month and made U.S. bonds less attractive to foreigners. Benchmark 10-year notes ended up 4/32 in price to yield 1.83 percent, down from 1.85 percent late Friday. The yields have increased by 14 percent this month, the largest monthly percent rise since February 2015. Two-year note yields, which are most sensitive to interest rate changes, increased by 11 percent this month, its worst performance since August.

Stock Market
1. U.S. Equities
Wall Street ended barely changed on Monday as investors digested the latest large-scale corporate mergers as well as the most recent twist in a tumultuous U.S. presidential election. The Dow Jones industrial average fell 18.77 points, or 0.1 percent, to 18,142.42, the S&P 500 lost 0.26 points, or 0.01 percent, to 2,126.15 and the Nasdaq Composite dropped 0.969 points, or 0.02 percent, to 5,189.135. Closing out a big month for mergers, Dow component General Electric slipped 0.4 percent after the industrial conglomerate said it would merge its oil and gas business with oilfield services provider Baker Hughes. Baker Hughes fell 6.3 percent.

2. Hong Kong Equities
Hong Kong's benchmark index ended little changed on Monday, but fell 1.6 percent in October, snapping a three-month rising streak and suggesting a strong rally since February is losing steam. The Hang Seng index fell 0.1 percent to 22,934.54 points, while the China Enterprises Index gained 0.5 percent to 9,559.39.