The week before Christmas is usually about long festive lunches and readying for a well-earned break, but traders will be on their toes this year, thanks to possible tax cuts in the United States.
Progress of one of the biggest US tax rewrites since 1986 will take centre stage this week as Republican lawmakers and President Donald Trump try to score their first major legislative win following the failed attempts to repeal Obamacare.
It is looking up for Mr Trump after once-wavering Republican Senators Marco Rubio and Bob Corker pledged support over the weekend.
Still, the resistance from three committed Republican senators is enough to defeat the measure in a Senate that Mr Trump's party controls with a slim 52-48 majority.
Republican leaders want to vote on the Bill in both chambers of Congress early this week so that the President can sign it into law before Christmas, making it the most important factor hanging over regional markets from today's opening bell.
IG Markets analyst Pan Jingyi noted that markets had reacted largely to central bank meetings last week, with the US Federal Reserve's conclusion being a key component.
She said hopes for a more aggressive interest rate hike path in 2018 were dashed, leading to a decline in the US dollar and financial stocks.
Investors will be expecting a slew of US indicators that will be rushed out before the Christmas holidays, she added. "These include November's personal income and spending numbers, durable goods and housing updates. The final reading for third-quarter gross domestic product will also be released; (these are) ones to keep on the radar alongside the tax votes."
Economic data and market action in China, India, and the US last week have been instructive, revealing the underlying forces of normalisation, said DBS in its weekly wrap.
"With growth and trade going strength to strength globally, the monetary authorities in China and the US are trying to revert to a non-crisis policy stance," it noted.
"In India, the central bank is seeing nervousness about inflation, balance of payments and fiscal pushing up long-end yields. Easy money days are becoming scarce in all three cases."
In particular, the People's Bank of China's move to tighten some rates last Friday is a tactic to safeguard the stability of the Chinese currency while the US Fed carries out its rate hikes, noted DBS.
"It also signals that de-leveraging in China will persist. The capability of small/medium banks to roll out ambiguous wealth management products will be weakened further due to rising funding costs."
Now that the central bank meetings in advanced economies have settled, attention will turn to Asia, with banks in Japan, Taiwan and Thailand expected to meet, but analysts are not expecting changes in monetary policy.
The latest message tweak from the Bank of Japan was further affirmation that the central bank is unlikely to shift its stance in the near term, said Ms Pan.
At home, Singapore's November non-oil domestic exports will be released today with a significant moderation expected.
