Trade tensions the biggest threat to markets in 2020, say traders
Traders are worried about the impact international trade tensions will have on the markets in 2020, but only see Brexit as a minor concern, a new survey from JP Morgan has found.
Despite the “phase one” deal between the US and China lessening tensions, 50 per cent of the 650 online traders surveyed by JP Morgan said trade tensions would affect markets most this year.
One in five said the risk of a US recession would have the biggest impact on markets, while just four per cent said Brexit would be the biggest factor.
The survey highlighted the extent to which tensions between the US and China – the world’s two biggest economies – look set to dominate financial news in 2020 despite the first steps towards a comprehensive agreement.
Concerns about Brexit have dropped, however, after Prime Minister Boris Johnson’s landslide election victory in December set the UK on a path out of the EU with a deal.
The survey – which mainly spoke to foreign exchange specialists – also revealed that traders think mobile trading applications will be the most influential factor shaping the industry over the next 12 months.
Apps such as eToro, IG Markets and City Index have shaken up the world of trading in recent years, and experts expect this to continue.
However, traders think artificial intelligence and machine learning will be the most influential force over the next three years.
“Machine learning is an underlying technology that we use to enhance and improve tools,” said Scott Wacker, global head of fixed-income, currencies and commodities e-sales at JP Morgan.
“I think the next stage is to apply machine learning to a number of trading systems, again to look for the most optimal outcomes, to be able to provide liquidity and pricing to our clients better as things advance.”