Friday is the real test—what is the market waiting for?

The Venezuela news that broke on January 7th barely caused a ripple in the bond market. Traders have long been focused on two other things: the upcoming non-farm payroll report over the weekend, and the Supreme Court's imminent ruling on the legality of global tariffs.

Since the government shutdown last year, the non-farm data for October and November has been a mess—the figures fluctuate wildly, making it impossible for investors to get a clear picture of the true labor market conditions. Now everyone is waiting for the Bureau of Labor Statistics to release a truly "clean" employment report to dispel doubts.

A capital markets strategist at Montreal Bank straightforwardly said: This Friday's employment report could give the market a strong boost.

But the story is far from over. On the same day, the U.S. Supreme Court is set to endorse Trump's tariff policies—whether in support or opposition, the impact of this ruling is no less significant than the non-farm data.

Even more interesting is that the U.S. bond market hit a nearly 9-month high on Tuesday: the spread between 10-year and 2-year Treasury yields is sending a clear signal—traders are betting that the Federal Reserve will cut rates in 2026.

So, the Venezuela news can just serve as background noise. What truly can shake the market is the dual impact of this Friday's "non-farm + tariffs" data. Once these two pieces of data are out, the market trend for the next few weeks will be pretty much set.