While the market starts to take shape for the New Year, we have some important events that could shape trading this week

I may have warned earlier that the market needs some time to settle but we have a big week of data to kick off the new year. Here's 5 events this week that could shape trading for the months ahead

1. Eurozone inflation

The market got itself all upset when the ECB failed to deliver on QE in Dec. The standout point for me was the recognition that the Eurozone is showing signs of a recovery. Inflation is the big number in Europe and it's what QE is supposed to fix. Tomorrow we get the Dec flash number and if we see it rise then that's going to chip away at any dovish expectations of the ECB. So far Germany has popped out unchanged year on year regional numbers but missed on the main headline number. That might put some early jitters on tomorrow's release

2. Eurozone economic sentiment, retail sales and unemployment

Three data points but they fall under 'any other data' as far as the Eurozone goes

Today's manufacturing data was another step in the right direction. There were variations amongst the countries but expansion is the theme. The big numbers from the economic sentiment data will be the consumer inflation expectations numbers. Higher than 3.7 will be another bullish signal for Europe

If all these numbers improve then we are going to see the euro underpinned. The market got a slap round the chops for overestimating the ECB, and if the ECB's actions are justified by the data, then I see only one direction for the euro and a theme of reducing QE expectations over the months ahead

3. UK services PMI

The pound is already looking the weak link this year. It's hard to see any good data changing the trend but a good close to the year in services may put a positive step in the quid, albeit briefly

While GBPUSD is the bucking bronco right now, EURGBP could be the pair that sets the tone for the pound this year. It's going to be UK vs EZ data, and a divergence in the numbers will affect the monetary policy divergence between the BOE and ECB

4. US ISM manufacturing

Last months drop into contraction didn't stop the Fed in their tracks. It may only account for a small portion of GDP but it's still an important sector for the US economy in a broad sense.

5. US jobs

The strong jobs run goes on. Nothing last forever and one big tipping point for rate expectations will be if we see the jobs market trip over. Just a stumble won't shock the market but if we close off the year with a poor number then nerves might start jangling as we enter the "weather zone". The wage numbers will be the main focus again. A decent gain and the dollar will warm to further Fed hikes. Softer and those expectations will cool

The market will be trading the rate path this year. Don't expect it to be as exciting as the dollar trade through QE, the taper and the hike, but all the data will move the dollar in the context of the next rate trade

The big theme across all these numbers is that they close off Q4 2015, so it's last knockings on GDP expectations. While the GDP releases may be old news by the time they come around, it will mark growth for 2015, and that will be taken in a historical context. If growth continues to trend lower that's going to make it harder for the market to see further hikes (in the case of the US), the first from the BOE and place more pressure on the ECB to act. These alone will form a big part of trading trends this year

Lots to look forward to and lots to start off trading in 2016