JPMorgan Chase & Co. electronic trading survey suggests global financial-market turbulence sparked by US tariff announcements is just the beginning of a volatile year. Inflation and tariffs are expected to have the biggest impact on markets in 2025, followed by geopolitical tension. The survey of over 4,200 institutional traders highlighted that 41 percent see volatility as their biggest daily trading challenge, up from 28 percent last year.
Eddie Wen, JPMorgan’s global head of digital markets, noted that the timing of volatility this year is unexpected, with markets reacting to news headlines in surprising ways. Traders are uncertain about the impact of tariffs on different asset classes, leading to increased trading activities of currencies like the Canadian dollar, Mexican peso, and offshore Chinese yuan.
Prior to President Trump’s trade levies and policy changes, concerns were already rising about the unpredictable nature of tariff announcements. The survey was conducted before the recent market disruptions, including the Mexican peso and Canadian dollar fluctuations following tariff threats. The dollar has shown some strength against most currencies in light of recent events.
Traders are anticipating a year of high volatility and are preparing for increased electronic trading activity. With the uncertainty surrounding tariffs and inflation, traders are seeking liquidity to rebalance their portfolios quickly in response to market movements. Electronic trading is seen as vital during times of uncertainty, allowing traders to access various platforms and channels to manage risks effectively.
The survey also revealed that while most respondents are planning to increase electronic trading activity, 71 percent have no plans to trade cryptocurrencies. This is despite the recent surge in Bitcoin and other digital currencies following Trump’s election victory. The administration’s support for the market and reduced barriers for traditional banking institutions to enter the digital asset space are seen as positive developments by industry experts.
Overall, traders are bracing for a volatile year ahead, with tariffs, inflation, and geopolitical tensions driving market movements. The uncertainty surrounding these factors is expected to continue shaping trading decisions and strategies as the year progresses.
