Volatility, Inflation and Tariffs: Welcome to a Trader’s 2025

The ninth annual JP Morgan e-Trading Edit finds, unsurprisingly given geopolitical machinations, that inflation and tariffs are top of mind for traders in 2025, with the biggest challenge likely to be volatile markets – although the 41% that cited this as the main challenge, while up on 2024’s 28%, is down on 2023’s 46%.

The Edit surveyed more than 4200 traders across over 60 locations, and found that inflation and tariffs have beaten out recession risk for a second year as having the likely biggest impact on markets, with over half seeing the impact coming. In 2024 this was 27%, although geopolitical risk at 18% has replaced recession risk (7%) in second place.

In terms of the challenges, it is interesting to note that while volatile markets are most feared, actually getting a trade done isn’t – liquidity availability has fallen to 17% as the main challenge, from 24% in 2024 and 22% in 2023. So while clients may be challenged by volatility, it seems they are comfortable that their LPs are not.

Workflow efficiency continues to grow in importance, with 15% citing this as the biggest challenge (up from 13% in 2024 and 9% in 2023), while another topic that is simmering away in markets – the cost of data – is next in line with 8% citing it, up from 7% and 6% respectively over the previous two edits.

Again, suggesting that LPs are getting their house in order, best execution requirements and information leakage, while still a concern to some, have barely moved the needle over the past two years.

For the third year in succession AI/machine learning is seen as the most influential, suggesting that either the pace of development is driving sustained change or the technologies are failing to have a serious impact on traders’ minds. That said, it has increased its importance, to 67%, from 61% in 2024 and 53% in 2023. API integration remains a hot topic in second place at 15% (up from 13% in 2024 and 14% in 2023), while there is bad news for blockchain enthusiasts – it’s still not getting through to traders. In 2023, 12 % cited it as the most influential technology, this dropped to 7% in 2024 and has drifted further, to 6%, in the latest Edit.

The good news for crypto fans more generally is that while 71% of respondents said they had no plans to trade crypto in the year ahead, this is down from 78% in 2024. Equally, 16% said they did have plans, up from 12%, while more (13%) are actually trading crypto, up from 9%.

Equally, natural language processing, which grabbed a 7% share of attention in 2023, has drifted for the second successive year, and is now at 5%; and mobile trading applications are steady at 6%, although it was at 7% in 2023.

E-Trading on the…Drift?

Interestingly, e-trading in FX remains stagnant to slightly lower in the latest Edit. After predicting that 66% of their flow in 2023 will be via electronic channels, this fell to 65% in 2024 and has dropped again in the latest survey, to 63%. It is notable that apart from cash equities and equity derivatives, all asset classes covered in the Edit saw their predicted share of e-trading drop, including G10 and EM Rates, futures and options, and commodities.

With more dealers starting to push non-multi-dealer channels, especially in the wake of the news that Bloomberg is going to start charging brokerage, there is evidence that they may be finding support from some clients

This sits in a stark contrast to the 2024 survey, in which 100% of respondents expected to increase their e-trading activity. This is, perhaps, another impact from increased volatility and uncertainty.

In terms of the channels, multi-dealer platforms are used by 38% of respondents, 28% use single dealer platforms, while 34% use both. This is across asset classes, it is likely that in FX, for example, the results could be different.

With more dealers starting to push non-multi-dealer channels, especially in the wake of the news that Bloomberg is going to start charging brokerage, there is evidence that they may be finding support from some clients, with 29% citing reduced execution and brokerage costs as the top priority when using a single dealer platform – this was especially the case in FX, where 29% cited it, and credit spread (31%).

Access to inventory and liquidity was another reason to choose a single dealer platform, cited by 27% overall, while a multi-asset offering was important to 15%, reducing information leakage to 8%, and internalisation to 6%.

Although e-trading ratios may be on the decline, dealers still find the data and analytics packages on single dealer platforms valuable, with 30% citing real-time data and analytics as most valuable, followed by analytics and visuals to support trade idea generation at 17% and predictive/pre-trade modelling at 14%. This all speaks to the pre-trade TCA services that are available.

Ease of access and the overall experience was the most valuable aspect of a platform outside of pricing and execution, followed by the ability to monitor positions and actions post-trade.