Early-2026 Signals: U.S. Labor Data and ISM Take Focus

The Week Ahead: Week of January 5, 2025 (GMT+8)

Weekly Market Preview
Following the New Year holiday lull, markets reopen with a renewed focus on whether late-2025 growth moderation is carrying into early 2026. The U.S. services sector, labor market conditions, and wage dynamics will dominate attention, as investors look for confirmation that cooling inflation has not come at the expense of economic resilience.

In Europe, German CPI and Eurozone inflation data will help shape expectations for ECB easing later in the year, while U.S. employment indicators from ADP and JOLTS to Nonfarm Payrolls will provide a comprehensive snapshot of labor market health. With positioning still light and liquidity gradually normalizing, data surprises could trigger outsized moves across FX, rates, and equities.

Key Events to Watch:

Monday, January 5 – 18:00
US ISM Manufacturing PMI (Dec)
Previous: 48.2 | Forecast: N/A | Actual: N/A
The ISM Manufacturing PMI will offer an early gauge of whether U.S. factory activity stabilized into year-end. A reading below 50 would reinforce the narrative that manufacturing remains a drag on growth, supporting bonds and weighing on the dollar. Any upside surprise could temper recession concerns and lend modest support to risk assets.

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Monday, January 5 – 18:00
US ISM Manufacturing Prices (Dec)
Previous: 58.5 | Forecast: N/A | Actual: N/A
Input price pressures remain closely watched as a proxy for pipeline inflation. Elevated prices would challenge the disinflation narrative and keep Fed easing expectations in check. A softer reading would reinforce confidence that inflation pressures continue to cool into 2026.

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Tuesday, January 6 – 16:00
German CPI (MoM) (Dec) – Preliminary
Previous: -0.2% | Forecast: N/A | Actual: N/A
Germany’s inflation print will be an early signal for broader Eurozone price trends. A rebound would complicate expectations for ECB rate cuts, potentially lifting the euro. Continued softness would reinforce disinflation momentum and support dovish ECB pricing.

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Tuesday, January 6 – 17:45
US S&P Global Services PMI (Dec)
Previous: 52.8 | Forecast: N/A | Actual: N/A
The services sector remains the backbone of U.S. growth. A resilient reading above 50 would suggest domestic demand remains firm, supporting equities and the dollar. A downside surprise could raise concerns that growth is cooling faster than anticipated.

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Tuesday, January 6 – 18:00
US ISM Non-Manufacturing PMI (Dec)
Previous: 52.6 | Forecast: N/A | Actual: N/A
The ISM Services PMI is a key barometer for broader economic momentum. Strength would reinforce the soft-landing narrative and push back against aggressive Fed easing bets. Weakness would pressure yields lower and weigh on risk sentiment.

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Tuesday, January 6 – 18:00
US ISM Non-Manufacturing Prices (Dec)
Previous: 65.4 | Forecast: N/A | Actual: N/A
Services inflation remains the Fed’s primary concern. Persistently high price pressures could revive “higher-for-longer” concerns, supporting the dollar. A meaningful decline would bolster expectations for policy easing later in 2026.

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Wednesday, January 7 – 13:00
Eurozone CPI (YoY) (Dec)
Previous: 2.1% | Forecast: N/A | Actual: N/A
Eurozone inflation trends will guide expectations around ECB timing. A hotter print would challenge dovish expectations and lift EUR crosses, while a softer reading would strengthen the case for rate cuts as early as mid-2026.

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Wednesday, January 7 – 16:15
US ADP Nonfarm Employment Change (Dec)
Previous: -32K | Forecast: N/A | Actual: N/A
ADP data will provide an early signal ahead of Friday’s payrolls report. Continued weakness would reinforce labor market cooling narratives, pressuring the dollar. A rebound could stabilize USD positioning into NFP.

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Wednesday, January 7 – 18:00
US JOLTS Job Openings (Nov)
Previous: 7.670M | Forecast: N/A | Actual: N/A
Job openings remain a key indicator of labor market tightness. A decline would confirm easing demand for workers, reinforcing dovish Fed expectations. Elevated openings would suggest resilience, supporting yields and the greenback.

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Thursday, January 8 – 16:30
US Initial Jobless Claims
Previous: N/A | Forecast: N/A | Actual: N/A
Weekly claims will be watched for confirmation that labor market softening remains orderly. A sharp increase could spark risk-off moves, while stable claims would support confidence ahead of payrolls.

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Friday, January 9 – 16:30
US Average Hourly Earnings (MoM) (Dec)
Previous: 0.1% | Forecast: N/A | Actual: N/A
Wage growth remains critical for inflation outlook. Accelerating earnings would complicate the Fed’s easing path, supporting the dollar. A subdued print would reinforce disinflation momentum.

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Friday, January 9 – 16:30
US Nonfarm Payrolls (Dec)
Previous: 64K | Forecast: N/A | Actual: N/A
December payrolls will anchor market sentiment for early 2026. A weak report would confirm labor market cooling and support bonds and equities. Strong hiring would revive concerns that inflation pressures may persist longer than expected.

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Friday, January 9 – 16:30
US Unemployment Rate (Dec)
Previous: 4.8% | Forecast: N/A | Actual: N/A
The unemployment rate will provide final confirmation of labor market health. A rise would reinforce dovish policy expectations, while stability or improvement could lend support to the dollar into the following week.