Global markets enter Friday facing a rare convergence of macro and political risk, with US payrolls and a potential Supreme Court ruling on President Donald Trump’s tariff regime set to define near term direction across asset classes. Together, these events represent the most significant stress test for risk sentiment since equities rebounded from April’s tariff induced selloff.
The December US jobs report is the immediate focal point. After months of disrupted data caused by the government shutdown, traders are looking for clarity on whether the labor market is cooling fast enough to justify further Federal Reserve easing. At SARACEN MARKETS, we expect payroll growth of around 70,000 jobs, modestly stronger than the prior month, alongside a decline in the unemployment rate to 4.5%. Any deviation from this profile could sharply reprice rate expectations.
Money markets currently reflect confidence that the Fed will deliver at least two quarter point rate cuts in 2026, but that conviction hinges heavily on today’s data. A softer print would reinforce the easing narrative, while upside surprises risk reviving concerns that policy may stay restrictive for longer.
Compounding the uncertainty is the US Supreme Court, which may rule as soon as today on the legality of Trump’s so called “reciprocal tariffs.” The decision has sweeping implications for trade policy, corporate margins and inflation expectations. Hundreds of firms are already positioning to reclaim billions of dollars in duties paid, underscoring the scale of potential market fallout.
Beyond the US, traders are also keeping a close watch on geopolitical developments in Venezuela and Iran, adding another layer of headline risk to an already fragile setup.
Markets are not bearish but they are hesitant. With confidence still rebuilding after weeks of distorted data and policy noise, traders are demanding confirmation before committing capital.
Key Focus Points for Traders
- US Payrolls: Crucial signal for the Fed’s 2026 rate cut trajectory
- Fed Pricing: Two cuts priced, but vulnerable to data surprises
- Supreme Court: Tariff ruling could reshape trade and inflation outlooks
- Risk Sentiment: Equities facing their biggest test since April
- Geopolitics: Venezuela and Iran remain background volatility drivers
This is a headline driven, high volatility session. With payrolls and a potential landmark court ruling landing on the same day, risk reward favors discipline over aggression. Expect sharp moves across FX, rates and equities traders should stay nimble, avoid oversized positions, and let confirmation, not conviction, guide execution.