(Bloomberg) — Investors’ tolerance for risk has been falling since mid-October when news about the omicron Covid variant started breaking. That may continue for a while as the spread accelerates in the U.S., and particularly after President Biden’s economic plan lost crucial support.

Their global exposure to credit, commodity and FX markets together can provide a road map for risk assets. The and U.S. high-yield corporate credit spreads, for example, have traditionally followed the pair’s direction. That’s meant a downtrend over the last two months. 

It’s likely to continue into the holidays with expected thin liquidity and light trading volume. It could even accelerate due to the impact on global growth posed by omicron’s spread and the loss of Senator Joe Manchin’s support for Biden’s Build Back Better plan. Europe is seeing lockdowns to combat the spread of the Covid virus, which has also been causing travel disruption in the U.S. Meanwhile, Goldman Sachs (NYSE:) has already cut it’s economic forecast due to the failure of Biden’s infrastructure plan, which was largely priced into growth expectations. 

So as the risks pile up, it’s worth watching the Australian dollar versus the Japanese yen for signs of where growth goes next. 

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