The next few weeks will be crucial to this year's redundancies and next year's hiring

As of next Monday everyone except university students will be back from holiday. If big investment banking job cuts in October and November are to be avoided, the summer apathy needs to lift - fast.

Last month the Financial Times pointed out that trading volumes were down 30% year to date. And the Wall Street Journal illuminated the fact that the 18 trading sessions after US Labor Day - when investors typically become more active - will be crucial for third quarter earnings. Labour Day is next Monday.

Anecdotally, conditions in August may not have been too bad. Rumour has it that Nomura, whose second quarter was not good, had a reasonable month. July, however, was dire. Figures from the London Stock Exchange show trading volumes were down 32% year on year, and down 51% on July 2008.

"It's been a dismal two months," says the head of one markets focused search firm in London. "Bits and pieces have happened, but really not much."

"August has been totally dead," confirms a partner at another markets search boutique. "The general view is that there are going to be redundancies soon."

2011 hiring plans

September is rendered all the more important by the fact that it's when banks traditionally formulate hiring plans for the following year and put tentative mandates out to market.

"We would expect people to come to us with 2011 their hiring plans throughout September and October," says the search partner. "However, whatever happens we are anticipating a reasonable amount of recruitment next year simply because there have been a lot of recent personnel changes at a senior level."

The FX exception?

The exception to the poor volumes story is FX, where as the Bank for International Settlements points out, volumes in London have soared.

However, much of the growth is due to algorithms and hedge funds. Martin Gymer, CEO of FX option recruitment specialist Marshall Whitney, says there's been a pick up in demand for FX options salespeople in London, but that most hiring is focused on Asia and emerging markets.