The market's attention will likely remain on the CNY, given that the Chinese authorities have signalled that they will allow the currency to fall more against the USD. The recent announcement of the launch of the CFETS CNY index is a clear indication that China will allow USDCNY to move higher in an environment of USD strength, as the authorities shift their focus towards a basket measure of currencies. 

"We see more room for yuan weakness ahead against the USD, with the offshore CNH currency likely to be more volatile, although at risk of facing stronger intervention, given that the CNH-CNY spread has widened sharply of late. We maintain our long USDCNH and USDKRW trade recommendations", notes Barclays.

China's Caixin manufacturing PMI (Monday) will be the key data focus of the week, following the official NBS measure released on Friday, providing another gauge of December activity. The Caixin PMI is expected to have edged down to 48.5 (consensus: 48.9; last: 48.6). Singapore is scheduled to release the advance estimate of its Q4 GDP,  for which a small sequential improvement is expected in Q4 growth. Elsewhere, we receive December export numbers from Korea, Taiwan and Malaysia, which are likely to show double-digit contractions on a y/y basis (USD terms), given the drag from weak external demand.