U.S. Stimulus Optimism Dominates Quiet Asia-Pac Session

Cautious optimism took hold in early trade this week as participants scrutinised weekend comments from U.S. Tsy Sec Yellen, who kept pushing for a sizeable Covid-19 stimulus package. The Antipodeans caught a light bid, even though a lack of major headlines kept G10 crosses rangebound. New Zealand observed a public holiday. AUD/JPY topped Y81.00 for the first time since 2018. Meanwhile, AUD/USD trades at $0.7674 at typing, ahead of the expiry of $1.0bn worth of options with strikes at $0.7650.

• USD/JPY resumed gains after snapping its seven-day winning streak on Friday, but failed to test the nearby 200-DMA. Japanese news flow revolved around potential for the early lifting of the state of emergency introduced in 10 prefectures. BBG reported that the UK's Dialog Semiconductor is in talks to sell the company to Japan's Renesas Electronics for ~EUR4.9bn.
• The DXY edged higher, moving away from Friday's lows.
• The PBoC fix fell roughly in line with expectations. The bank injected CNY 10bn, a still small injection by historical standards but the PBOC seem to be comfortable with liquidity in the system heading into LNY.
• German industrial output as well as comments from BoE Gov Bailey, Fed's Mester and ECB's Lagarde & Villeroy headline today's economic docket.