This week, US Congress returns from Thanksgiving recess to a full legislative agenda - that is likely to have a binary impact on equity sentiment, USD dollar and USTs:
Trump meets Congressional leaders (Tue) to discuss extending the stopgap measure: The current stopgap measure runs through 8 Dec. With both chambers averse to 'playing the Grinch' before Christmas holidays, one baseline scenario is to avoid a govt shutdown by kicking the can down the road (just how far down is an open question). Unlike the tax cut bill, the GOP need 60 votes for passage in the Senate, which in turn requires help from the Dems. A quid pro quo arrangement is possible: GOP get to raise spending caps for defense and border wall funding - while Dems get a similar raise in non-defense spending as well as assurance for undocumented children (aka 'Dreamers').
Senate GOP may put their tax bill to a 'make or break' floor vote (as soon as Thu): Senate GOP say they may put their version of tax legislation as soon as Thursday. With 52 members in the chamber, the party can only afford to lose 2 votes. Markets will closely watch commentary from key Senators - including Ron Johnson (R-WI) who expressed reservations regarding the accelerated process (a similar criticism expressed months ago by R-AZ John McCain wrt healthcare overhaul) as well as Susan Collins (R-ME) who expressed concerns about removing the Obamacare individual mandates (a similar position held by R-AK Lisa Murkowski until she recently said she would support that same provision).
In Fed-speak, next Chair Jerome Powell will testify at Congress, current Chair Yellen speaks on Wed. Outgoing NY Fed Dudley will have speaking engagements, including one with US Treasury Secretary Mnuchin on Tue. The Fed Beige Book is out on Wed.
In econ data, GDP is out Wed along with core PCE - the Fed's preferred gauge - on Thu.
Also this week, OPEC meets (Wed-Thu) for their long-awaited decision on oil output. Markets are positioned for at least a six-month extension of the current output agreement that ends in March 2018. This after tentative signs from Russia Energy Minister Novak that Russian oil companies won't stand in the way of the agreement's renewal. Recent stability in oil prices - amid higher US shale output - suggest this is well-priced in Brent/WTI contracts and any further leg-up more than a knee-jerk +$2-3 would require deepening - not merely extending - oil supply agreement (eg limiting exports).