Compared with last year, the first month of 2014 saw sizable declines in bond issuance and trading, both major engines of revenue for Wall Street. The average daily volume in U.S. bond trading fell 16% from a year ago, and bond issuance was off 24%, according to data from the Securities Industry and Financial Markets Association.

Of course, markets could snap back in the remainder of the quarter, especially because jitters over emerging markets seem to have subsided. And trading performance can vary widely among banks. But the first quarter of the year is typically one of the busiest periods for debt-market activity, and so particularly important, both for U.S. banks and major European firms.

The deepest freeze was in the huge market for mortgage bonds backed by Fannie Mae and Freddie Mac. The average daily trading volume for the month fell 42% to $170.3 billion from $293.3 billion a year earlier. The importance of mortgage-bond trading to Wall Street's bottom line was highlighted last month when Goldman Sachs Group GS said in reporting results that "significantly lower net revenues in mortgages" was primarily to blame for a 15% decline in the firm's quarterly fixed-income, currency and commodities revenue.

The even bigger market for Treasurys also saw a decline in January, although this was just a fall of 1.3%. Corporate-bond trading saw a similar decline, while activity in municipal markets was off a more marked 11%.

 Making matters worse, more-subdued trading at the year's onset was accompanied by a slow start in debt underwriting. While the bulk of a 24% contraction versus January 2012 issuance was due to a nearly 55% fall in mortgage-related debt, likely reflecting the sharp drop-off in mortgage refinancings due to rising interest rates, corporate issuance declined 15% and municipal issues shrank 30%.

While underwriting revenue is typically more evenly spread throughout the year than trading revenue, January issuance is often at or near the year's high point for corporate bonds.

And the first quarter often sets the pace for revenue for the rest of the year. At Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America, nearly a third of annual fixed-income, currency and commodities trading revenue has tended to be generated in the first quarter.

 Moreover, this trading revenue is an important contributor to overall bank results. It ranged from about 25% of overall revenue last year at Goldman to about 10% at Bank of America. Revenue from underwriting is a smaller contributor, but is equal on average to about 5% of overall revenue at the banks.

None of this is good news at a time when banks are struggling to increase their top lines, due to reduced loan demand, particularly among consumers, and structural shifts in capital markets that have reduced trading volumes. At the same time, Volcker rule limitations on proprietary trading have made banks more dependent on customer activity.

For the first quarter to shine, banks may have to show they can go against the trading flow.