Pips for Breakfast: January 7, 2026

Good morning. Pour a double shot of espresso and check your stops. The market is waking up, and it looks like it skipped breakfast.

On This Day

In 2016, the Chinese stock market decided it had seen enough after just 29 minutes of trading. Circuit breakers kicked in, everyone went home early, and global markets spent the rest of the day in a collective panic. In 2015, EUR/USD was busy sliding to nine year lows because the ECB decided printing money was the latest fashion trend.

The Play

EUR/USD: The pair is currently suffering from its annual early January identity crisis. If the Eurozone CPI data at 05:00 UTC misses the 2.0% forecast, expect a move toward the recent lows. The "January Effect" usually involves funds rebalancing, and right now, nobody seems particularly eager to hold the Euro.

USD/JPY: Keep an eye on the 10:00 UTC JOLTS and ISM data. With Japanese services PMI slowing and China escalating tensions with Japan, the Yen is caught between being a safe haven and a punching bag. If US labor data surprises to the upside, the path of least resistance for USD/JPY remains north.

What's on Deck

EUR CPI (05:00 UTC): The forecast is 2.0%. Anything lower and the ECB might start sweating. Lower inflation means more excuses for rate cuts, which usually sends the Euro to the basement.

USD ADP Employment (08:15 UTC): We're looking for 49K after a bizarre negative print last time. ADP is like the trailer for a movie. It's often misleading, but everyone watches it anyway to guess what Friday's NFP will look like.

USD ISM Services & JOLTS (10:00 UTC): This is the main course. If job openings fall significantly below 7.61M, the "soft landing" narrative might start to feel like a crash landing.

CAD Ivey PMI (10:00 UTC): For those who trade the Loonie and enjoy volatility with their morning maple syrup.

The Data Behind the Patterns View Packages →

Quick Pips

AUD/USD: Australian inflation is still hot, keeping a February rate hike on the table. The Aussie is currently the only person at the party who's still talking about their New Year's resolution.
Oil/CAD: Oil prices are sliding further, which is bad news for the Canadian dollar. If the Ivey PMI doesn't impress, CAD could be in for a rough afternoon.
Gold/Safe Havens: China's export ban on military goods to Japan is a classic "risk-off" signal. If the rhetoric heats up, expect Gold to catch a bid.

Why Your P&L Cares

The 2016 "30-minute trading day" in China is a reminder that liquidity is a fair weather friend. It's there when you don't need it and gone when you do. Today, we have China escalating tensions with Japan while simultaneously giving banks more room to sell bad loans. This suggests the world's second largest economy is feeling some structural pain.

Historically, this first full week of January is a minefield of fund rebalancing. Managers are moving billions around to fit their 2026 outlooks. When you combine that with a triple threat of US data (ADP, ISM, and JOLTS), the volatility isn't just a possibility, it's the baseline. EUR/USD in particular tends to be a theater of war during these rebalancing windows.

The Bottom Line

Keep your position sizes sensible and your coffee hot. We're staring at a heavy data calendar and a geopolitical environment that's getting spicy. Now go make some pips. You're fed.