Muted Start In Asia Keeps Majors In Ranges

A muted start in Asia after a mixed session in the US as markets continue to weigh prospects of a spending package from the US government. Optimism is also tempered by further coronavirus fears as the UK and much of Europe prepares to tighten restrictions further.

• AUD/USD is higher in Asia, last up 8 pips at 0.7542, the pair is still well off lows from the U.S session around 0.7578, but has seen some upside after a positive weekly consumer confidence figure, and an RBA December meeting minutes release that was broadly in line with market expectations. Elsewhere, RBA's Kearns noted that Australian property prices have performed better than expected.
• NZD/USD is broadly flat in Asia, last up 2 pips at 0.7083. The pair wavered on Monday and retraced after touching a fresh cycle high at 0.7120, the move was wiped out as crude oil slipped and has been the worst performer in the G10 basket.
• GBP is higher in Asia, last up 18 pips at 1.3342. The pair did venture as high as 1.3446 in the European session on optimism a Brexit deal would indeed be reached, but the move was retraced as the session wore on.
• USD/JPY is flat, last at 104.04 after dropping as low at 103.51 in the U.S. session. Japanese PM Suga has decided to call a halt to the nationwide "Go To" travel campaign for two weeks in a bid to reign in Covid-19 infections, while there are also rumours the BoJ is considering extending its corporate financing programme by 6 months.
• The PBOC fixed the USD/CNY mid-point at 6.5434, 73pips weaker than Monday. USD/CNH has trended lower early in Asia on the back of a weaker dollar but has moved higher post fix. Last trades at 6.5313, 23 pips higher on the session and off session lows of 6.5254.
• MYR has faltered in the lead-up to a key vote on the 2021 budget in Malaysian parliament committee, which will be watched as a gauge of support for PM Muhyiddin among lawmakers.
• Chinese monthly economic activity indicators hit the wires at the top of the hour. Later in the day, focus turns to UK labour mkt report, final French & Italian CPIs, U.S. industrial output & Empire M'fing, Canadian housing starts as well as comments from ECB's Rehn & BoC's Macklem.