What to watch

After yesterday's risk-off moves led by Omicron concerns and their political and economic impacts (particularly in the UK and Europe), we have seen a much more sanguine overnight session. Any Omicron developments will continue to be the near-term driver ahead of the main central bank meetings this week, however there are a couple of political votes to watch today.

• First the UK parliament will vote on plan B restrictions. All of the government's measures are expected to pass, with Labour set to vote in favour. The real question is how many Conservative MPs rebel against the plans, with the number of dissents expected to be around 80. With opinion polls pointing to falling support for Tories, today's vote will be watched closer than most.
• Second, the Senate is due to vote on legislation to increase the debt ceiling to keep the US government funded until at least November 2022. There is also a good chance the House vote today, and both votes are largely expected to pass, with Biden then able to sign into law.
• In case you missed it, we released our Fed preview yesterday ahead of tomorrow's meeting. The FOMC will shift in a hawkish direction at the December meeting as it eyes rising inflation risks. This shift will include a doubling of the pace of the asset purchase taper, a more aggressive rate “dot plot”, and an adjustment in the Statement language (including eliminating the word “transitory” to describe inflation). The FOMC signaling more than 2 hikes in 2022, or a hiking pace faster than 3 hikes per year, would be hawkish vs expectations. The full MNI Fed Preview is available here.