Market Analysis

Image Credit: Reuters

A global survey by JPMorgan Chase revealed that traders expect tariffs and inflation to have the greatest impact on global markets in 2025, with many preparing for heightened volatility. According to the survey of 4,233 institutional trading clients, 51% identified inflation and tariffs as the top market-moving factors—up from 27% last year.  

The uncertainty stems partly from U.S. President Donald Trump’s tariff policies, which have already caused market fluctuations. Major stock indexes dropped after Trump announced new tariffs of 25% on imports from Mexico and Canada and 10% on China, only to rebound after he delayed the measures. Many traders view these tariffs as inflationary.  

“Increased market activity early in the week indicated traders were rebalancing their portfolios due to currency fluctuations of 1-2%, particularly in the Canadian dollar, Mexican peso, and offshore Chinese yuan,” noted Chi Nzelu, JPMorgan’s global head of fixed income, currencies, and commodities e-Trading.  

Concerns about a potential recession have decreased, with only 7% of respondents seeing it as a major risk in 2025, compared to 18% in 2024. Instead, volatility remains the biggest challenge, cited by 41% of traders—up from 28% last year.  

“This year, volatility is arising unexpectedly, rather than being tied to scheduled events like elections or economic reports. Sudden market swings are now being driven by breaking news about government policies, triggering immediate reactions,” said Eddie Wen, JPMorgan’s global head of digital markets.  

The report also highlighted key concerns in market structure, including liquidity access, regulatory changes, and market data costs. Additionally, traders predict electronic trading will expand across various asset classes, including emerging market rates, commodities, and credit spreads.

Paraphrasing text from "Reuters" all rights reserved by the original author.