The Week Ahead: Eurozone PMI, US ISM, jobs report

Welcome to Michael Kramer’s pick of the key market events to look out for in the week beginning Monday 5 January, 2026.

The year will begin with a slew of US economic data releases that investors are likely to watch closely, as this will be the first month in which incoming data has not been negatively affected by the US government shutdown in autumn 2025. In addition, the US JOLTS report and ADP private payroll report will be released. Economic data will also be released across Europe, while corporate earnings are expected to take a back seat, at least during this first week of the new year.

US ISM reports

Monday 5 & Tuesday 6 January

The US ISM manufacturing report is expected to show a modest improvement, with consensus forecasts calling for the index to edge up to 48.3 from 48.2. The ISM services report will follow on Tuesday 6 January, and is expected to show a decline to 52.3 from 52.6 in the prior month.

These reports are widely viewed as key gauges of economic health in the US economy, and any signs of renewed weakness or acceleration could have a material impact on the dollar – particularly against the Japanese yen, which has weakened sharply against the dollar in recent weeks.

Despite rising interest rates in Japan and the Bank of Japan's rate hikes, USD/JPY has continued to show signs of yen weakness, climbing to around ¥156.90. If the ISM surveys come in stronger than expected, it could prompt further weakness in the Japanese yen against the dollar, potentially pushing USD/JPY towards ¥158.30 – a level last seen in January 2025.

A sustained break above ¥158.30 would represent a significant warning sign for the yen and could increase the likelihood of intervention by Japan’s Ministry of Finance. Beyond that level, the next area of resistance would suggest a move towards ¥161.5, a level last reached in July 2024.

USD/JPY, March 2025 – present

^{Sources: TradingView, Michael Kramer}

Eurozone services PMI

Tuesday 6 January

Services growth across the eurozone has generally been improving over the past year. If this trend continues and strengthens – potentially signalling an acceleration in 2026 – it could prompt the European Central Bank to raise its growth forecasts again, possibly as soon as its next meeting. Such an outcome would offer support to the euro, which has strengthened materially since early 2025.

More recently, however, the euro has shown signs of stalling. Since the summer months began, it has traded sideways, which is somewhat concerning. While part of this may reflect weaker-quality economic data in the US, the euro’s decline has become more pronounced since the beginning of December. If EUR/USD breaks below $1.17, it could open the door to a move back towards $1.16, and potentially as low as $1.145. This is why positive economic news from the eurozone is critical. A move above $1.18 would help alleviate many of the downside risks currently developing from a bearish technical perspective.

EUR/USD, May 2025 – present

^{Sources: TradingView, Michael Kramer}

US jobs report

Friday 9 January

The US non-farm payrolls report is expected to show that 55,000 jobs were created in December, down from 64,000 in November. The unemployment rate is forecast to fall to 4.5% from 4.6%, while average hourly earnings are expected to rise 0.3% month-on-month and 3.6% year-on-year, up from 0.1% and 3.5%, respectively.

A key focus will be whether there are significant revisions to the November figures. Data collection for November had a low participation rate, raising the possibility that revisions could be material. As a result, the market may place greater emphasis on any revisions to November than on the December headline numbers themselves, unless December delivers a substantial surprise.

Implied volatility heading into this employment report is likely elevated, particularly given the limited recent economic data. In addition, implied volatility in US equity markets has been suppressed by year-end seasonal effects. As the week progresses, implied volatility is likely to rise steadily into Friday’s report, with the VIX 1-Day potentially moving back into the mid-teens and possibly towards 20. It’s not unusual for implied volatility to be bid up ahead of a significant economic release, and then fall sharply once the data is published at 1.30pm (UK time).

As a result, the initial move in equities, regardless of the underlying data, could be higher as implied volatility unwinds and hedges are unwound. However, this does not necessarily mean that such a move will persist throughout the session, and traders should monitor changes in implied volatility metrics closely.

Cboe 1-Day Volatility Index, July 2025 – present

^{Sources: TradingView, Michael Kramer}

Economic and company events calendar

Major upcoming economic announcements and scheduled US and UK company reports include:

Monday 5 January

• UK: Mortgage approvals (Nov)

• US: ISM manufacturing PMI (Dec)

• Results: No major announcements

Tuesday 6 January

• Australia: Composite & services PMI (Dec)

• Eurozone: Composite & services PMI (Dec)

• Germany: Consumer price index (Dec)

• UK: Composite & services PMI (Dec)

• US: Composite & services PMI (Dec)

• Results: Next trading statement (Q4)

Wednesday 7 January

• Australia: Consumer price index (Nov)

• Eurozone: November CPI

• Germany: Retail sales (Nov)

• US: ISM services PMI (Dec)

• Results: Constellation Brands (Q3), Jefferies Financial Group (Q4)
  

Thursday 8 January

• Australia: Trade balance (Nov)

• Eurozone: Consumer confidence (Dec), producer price index (Nov), unemployment rate (Nov)

• Results: Acuity (Q1), Greggs trading statement (Q4), Tesco trading statement (Q3 & Christmas), Marks & Spencer trading statement (Christmas), RPM International (Q3), TD Synnex (Q4)

Friday 9 January

• China: CPI, PPI (Dec)

• Eurozone: Retail sales (Nov)

• Germany: Industrial production, trade balance (Nov)

• US: Average hourly earnings, non-farm payrolls, unemployment rate (Dec), Michigan consumer sentiment (Jan)

• Results: J Sainsbury trading statement (Q3)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.