Week ahead: US payrolls data, UK retailer results eyed

2nd Jan 2026 12:34

(Sharecast News) - Investors face a busy first full trading week of the year next week, with key US labour market data, a heavy slate of global economic releases and several closely watched UK retail updates set to shape market sentiment.

The focus will intensify on Friday with the release of US non-farm payrolls for December, alongside the unemployment rate.

Michael Hewson at MCH Market Insights said recent data pointed to a cooling labour market after a strong first half of the year.

He noted that "the US labour market, after a strong first half, has seen a sharp slowdown in H2," adding that the impact of the government shutdown continued to weigh on hiring, with ADP data showing "three of the last four months showing a decline in hiring."

Markets will also track US ISM manufacturing and services surveys, jobless claims and factory orders through the week for further confirmation of the growth outlook.

In Europe, attention will be on PMI data early in the week, followed by German retail sales, industrial production and trade figures, as well as a broad set of euro zone sentiment and inflation indicators on Thursday.

In the UK, investors will digest consumer credit, mortgage approvals, the BRC shop price index, PMI surveys across services, construction and composite activity, and the Halifax house price index.

Corporate attention will centre on the UK retail sector, beginning with Next's fourth-quarter trading update on Tuesday.

Hewson said the quarter was likely to be "a challenging one given the lead-up to the budget ... and the prevailing gloom which has seen a sharp slowdown in consumer spending in the last few weeks," although he highlighted that the retailer has consistently outperformed expectations.

Aarin Chiekrie at Hargreaves Lansdown said investors expected overseas strength to persist, adding: "Markets wouldn't be surprised to see another small upgrade to the outlook next week."

Marks & Spencer and Greggs are both due to update on Thursday.

Hewson said M&S was still recovering from last year's cyberattack, which "hammered its profits as well as its reputation," while Chiekrie said the group would be hoping for a strong festive performance, noting that "with near-term profit expectations reset, the worst looks to be behind M&S now."

Greggs' update would meanwhile be watched for signs of stabilisation after a difficult year marked by cost pressures and weaker like-for-like sales.

Sainsbury's third-quarter update on Friday rounds out the week.

Hewson said the supermarket was performing well and remained firmly positioned as the UK's number two grocer, while Chiekrie said recent guidance upgrades appear achievable.

"The recently upgraded retail operating profit guidance of more than £1bn for the full year looks within reach," he said, citing market share gains and progress on cost savings.

Reporting by Josh White for Sharecast.com.

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