JP Morgan’s new e-Trading survey pooled more than 700 traders…The survey highlighted that the most significant impact on financial markets will come from inflation in 2022 – “48% of traders surveyed believe inflation will have the greatest impact on markets in 2022.”

JP Morgan’s new e-Trading survey pooled more than 700 traders.

The survey highlighted that the most significant impact on financial markets will come from inflation in 2022 – “48% of traders surveyed believe inflation will have the greatest impact on markets in 2022.”

“The expectation is that this focus and concern will likely lead to more market activity and volatility given that inflation has not been a theme for over a decade,” said Scott Wacker, head of FICC e-Commerce sales at JP Morgan. “This will continue to reinforce the importance of liquidity and consistency of pricing, which continues to play into the hands of electronic trading.”

Andreas Koukorinis, global head of Credit e-Trading at JP Morgan, added, "In my mind, it is a question of whether inflation expectations have already been priced in any uncertainty. And to the extent that central banks will taper the balance sheet and the pace at which they do that. Any deviation from what the markets are expecting will ultimately lead to higher bond volatility."

Once again Liquidity Availability topped the list of significant daily challenges (for a 6th consecutive year)

Koukorinis added: “What we have seen at the height of the COVID crisis is a lot of market participants ended up stepping back and removing liquidity from the market. I expect that also to be the case if we see increased bond volatility.”
The survey also highlighted:

• 27% of respondents currently trade crypto assets
• 78% said that e-trading will increase, with mobile trading apps being the key driver for this.
• Over the next three years, AI and machine learning, and Blockchain will be the most influential factors driving evolution in trading.

“We’ve had two years of pretty unusual circumstances with the pandemic – a lot of clients moved away from the office and to the home environments during a very volatile market environment, it was the perfect storm for increasing electronic trading,” said Scott Wacker.The survey polled 718 institutional trading clients at the end of November 2021. The results were published on Wednesday.