The first week of the new year sees multiple risks intertwined, with US employment data becoming the market focus

At the beginning of the new year, the global markets face a dual impact from geopolitical tensions and economic data releases. The situation in Venezuela has suddenly escalated, with the U.S. launching military actions in the region, while domestic economic data will also be densely released. Next week’s most anticipated event is the U.S. December Non-Farm Payrolls report, which is the first normal monthly data after the government shutdown ended. Its results will directly influence market expectations for Federal Reserve policy.

Geopolitical Risks Intensify

According to the latest news, the U.S. has launched a military strike against Venezuela and reportedly arrested President Maduro. This unexpected event has disrupted the calm in the Caribbean region and added uncertainty to the New Year markets. Geopolitical risks often push safe-haven asset prices higher and impact commodities and exchange rates. Such sudden events tend to trigger short-term market volatility, and investors need to closely monitor developments.

Key Economic Data Next Week

The U.S. will release a series of important economic data next week, with the December Non-Farm Payrolls report being the most watched. Below is the schedule of major data releases:

Why is the Non-Farm Payrolls Report Important

There are several reasons why this data is highly regarded. First, it is the first normal monthly data after the U.S. government’s record-breaking shutdown ended last year, providing a true reflection of the labor market. Second, employment data directly influence the Fed’s assessment of the economy and thus impact interest rate expectations. Third, the strength or weakness of the employment market often leads other economic indicators and can signal economic trends.

Better-than-expected employment data may support the dollar and push up U.S. Treasury yields; weaker data could raise concerns about economic slowdown and boost safe-haven assets.

Other Notable Events to Watch

Besides economic data, there are other events worth noting next week. The CES (Consumer Electronics Show) will be held from January 6-9 in Las Vegas. As an annual tech industry event, new product launches and technological trends may influence related sectors. Additionally, speeches by Federal Reserve officials often reveal the latest views on the economy and policy, providing market signals.

Market Impact Assessment

The dense schedule of data releases next week could lead to significant market volatility. On one hand, geopolitical risks may increase safe-haven demand, supporting the dollar and Treasury prices. On the other hand, the strength or weakness of employment data will directly influence market expectations for Fed policy, affecting stocks, bonds, and cryptocurrencies.

Investors should be cautious of multiple risk factors stacking up, which could amplify market swings. If employment data is strong and geopolitical tensions remain high, it could push the dollar and Treasury yields higher, putting pressure on risk assets. Conversely, weak employment data might lead markets to bet on Fed rate cuts, supporting risk assets.

Summary

The first week of the new year is a week of intertwined risks. The escalation in Venezuela adds geopolitical uncertainty, while the December Non-Farm Payrolls report, as the first normal data after the government shutdown, will directly influence market perceptions of the economy and policy. Investors should focus on Friday’s employment data release and closely monitor geopolitical developments. The market trajectory this week is likely to set the tone for the 2026 market outlook.