Asia Starts The Week On Cautious Note, GBP Rises On Brexit Talks Optimism

The combination of Covid-19 situation, U.S. fiscal saga and U.S. politics resulted in broader risk aversion, providing tailwinds to safe haven currencies and pushing USD to the top of the G10 scoreboard. Continued rapid spread of infections in Europe entailed further restrictions across the continent, while the U.S. reported a record daily surge in new cases. Meanwhile, U.S. House Speaker Pelosi and White House Chief of Staff Meadows exchanged accusations of "moving the goalposts" during their fiscal negotiations, while betting markets saw a pullback in the pricing of a "Blue Wave" in November. Commodity-tied FX generally struggled to regain poise, albeit NZD managed to recover with liquidity thinned by a market holiday in New Zealand.

• AUD failed to draw much support from the news that Australian Coca-Cola Amatil agreed to a A$9.3bn takeover offer from Coca-Cola European Partners.
• GBP picked up a bid after EU Chief Negotiator Barnier extended his stay in London through Wednesday to continue Brexit talks with the UK. The current phase of negotiations had been scheduled to wrap up on Sunday and resume in Brussels on Thursday.
• USD/CNH crept higher in sync with the greenback's appreciation, ignoring weekend comments from Chinese officials, who underscored willingness to facilitate the process of economic opening-up, while boosting China's capacity to manage associated risks. Elsewhere, CPC leaders convened to discuss the country's next five-year economic plan.
• USD/KRW defied broader risk-off feel and dipped to its worst levels since Mar 2019 ahead of tomorrow's release of South Korea's flash Q3 GDP data. Speculation about a potential hike in Samsung dividends drew some attention locally, with some analysts suggesting that the conglomerate might want to help children of the late chairman Lee Kun-hee pay the inheritance tax, estimated at KRW10.9tn.
• Hong Kong markets are shuttered for a local holiday.
• Focus today falls on German Ifo Survey, U.S. new home sales, a policy speech from Japanese PM Kuroda and comments from ECB's de Cos.