New Telegraph

Tariffs: JPMorgan’s Survey Shows Market Volatility This Year

Global financialmarket turbulence this week sparked by a series of US tariff announcements looks like just the beginning of a volatile year, Bloomberg reported a JPMorgan Chase & Co electronic trading survey as showing.

Inflation and tariffs will have the biggest impact on markets in 2025, followed by geopolitical tension, according to the annual trading poll.

Some 41 per cent surveyed highlighted volatility as their biggest anticipated daily trading challenge, up from 28 per cent last year.

“What sets this year apart is the somewhat unexpected timing of volatility,” said Eddie Wen, JPMorgan’s global head of digital markets, in an interview.

“Markets are reacting to news headlines in surprising ways, and I expect this trend to continue in the current climate,” he added. Traders are on tenterhooks given the lack of clarity over what impact tariffs will have on different asset classes.

The annual survey of over 4,200 institutional traders was conducted last month before President Donald Trump disrupted global markets with a series of trade levies and about faces.

Those concerns are expected to boost trading of currencies like the Canadian dollar, Mexican peso and the offshore Chinese yuan, said Chi Nzelu, JPMorgan’s global head of FICC e-trading.

On Monday, the Mexican peso fell almost three per cent before rebounding to finish the session 1.5 per cent higher. The Canadian dollar slid as much as 1.7 per cent before reversing losses to close higher by 0.8 per cent.

“These are really large moves for major currencies that sparked a lot of execution, from hedge funds to the retail market. We’ll see how this year goes, but as it starts, we’re already seeing some of our busiest days,” Nzelu said.

While hedge funds have been the most active in the foreign exchange market, the increased trading volumes around tariff news isn’t limited to that segment, he added.

The risk that higher import prices could rekindle inflation has lingered since Trump was elected president in November, dashing any expectations that the Federal Reserve will cut interest rates much further this year.

Trump had ordered 25 per cent tariffs on all goods from Canada and Mexico to take effect on Tuesday but put them on hold after leaders of the two countries committed to greater efforts to stem the tide of illegal migration and illicit drug traffic.

Across-the-board tariffs of 10 per cent on imports from China did go into effect but the White House hasn’t ruled out a pause.

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