Liquidity Returns as US Data Deluge Begins Again.
Summary:
Markets Reopen: Institutional liquidity returns to full capacity today as global desks resume operations, marking the true commencement of the 2026 trading year.
ISM Delay: The critical US ISM Manufacturing PMI was pushed back due to the holiday schedule and releases today (Monday), creating an immediate volatility event for the US Dollar.
Payrolls Finale: The week culminates in the release of the US Non-Farm Payrolls report on Friday, providing the first comprehensive labour market audit following the Federal Reserve’s December policy moves.
The "Twixmas" lull is officially over. Financial markets resume full operational capacity today, ending the period of thin liquidity and erratic pricing that defined the holiday break. Senior risk managers are back at their terminals, shifting the focus from capital preservation to strategic Q1 positioning. Unlike the slow drift of late December, the coming sessions offer a dense schedule of high-tier data, forcing investors to confront the reality of economic divergence between the US and the Eurozone from the opening bell.
Sterling traders face a busy domestic schedule, contrary to the quiet end of 2025. While the manufacturing data was released on Friday, the services sector takes centre stage tomorrow. The S&P Global UK Services PMI is due on Tuesday, followed by the Construction PMI on Wednesday. These releases will be crucial for validating the Bank of England’s growth forecasts. If the dominant services sector shows signs of slowing momentum, the Pound could struggle to hold its recent gains against the Euro.
US Dollar investors must navigate a back-loaded week of critical releases. The action begins immediately today with the ISM Manufacturing PMI, which was delayed from its usual slot. A strong reading here would reinforce the "US exceptionalism" narrative and potentially fuel a Dollar rally. Attention then pivots to Wednesday’s ISM Services report before culminating in Friday’s Non-Farm Payrolls. This trifecta of data will effectively set the trend for the Greenback in January, confirming whether the economy is heating up enough to challenge the Fed’s dot plot.
The Euro is preparing for a pivotal inflation test on Tuesday. The release of the Eurozone Flash CPI for December will dictate the immediate tone for the single currency. Markets are pricing in a continued cooling of price pressures, which would cement expectations for further ECB easing. If the data undershoots consensus, the policy divergence trade could widen, putting renewed downward pressure on EUR/USD as the US economy continues to show superior resilience.
Events to Watch This Week:
Monday, January 5: US ISM Manufacturing PMI (Delayed Release)
Tuesday, January 6: Eurozone Flash CPI Inflation Rate & UK Services PMI
Wednesday, January 7: US ISM Services PMI & UK Construction PMI
Friday, January 9: US Non-Farm Payrolls (NFP) & Unemployment Rate
This week represents the first true test of 2026 portfolios. For those looking to transfer, the release of the ISM Manufacturing data today provides an immediate hazard, while Friday’s payrolls report guarantees a volatile conclusion to the week. The return of liquidity allows for larger execution sizes, but the density of event risk suggests maintaining a cautious approach until the US labour market picture clarifies.
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