The PBoC's lower yuan fix and drop in China's composite PMI, upset markets risk sentiment. The emerging markets currencies are dragged down across the board as depreciating yuan is hurting regional confidence. The market seeks upbeat economic news, particularly with US ADP employment report in focus scheduled later this week.

It is too early to expect another Fed's rate hike in January as the U.S. financial market conditions continue to worsen and pace of RMB widening. Markets will be inclined to read FOMC minutes and the implications for the U.S. dollar.

Markets are on a close watch on the U.S. Non-Manufacturing ISM (Societe Generale forecast 57.0, cons 56.0) scheduled today and the minutes of the December FOMC meeting which will be posted after the market close. 

"Our economists stick to their call of three hikes in 2016 despite having lowered their Q4 2015 GDP growth forecast to 1.3% qoq annualized," noted Societe Generale in a research note.