Inflation and the U.S. presidential election will be the biggest drivers of global markets this year, while liquidity challenges are a growing focus, according to traders surveyed by JPMorgan.

Some 27% of traders see inflation as having the biggest impact, followed by 20% for the November election, the survey published on Tuesday showed.

Bonds and equities rallied late last year on hopes that slowing inflation would prompt hefty central bank rate cuts this year. But those bets have been scaled back, with Friday’s blowout U.S. jobs data prompting the biggest sell-off in U.S Treasuries since September.

Markets are bracing for further volatility as the U.S. presidential election looms, with former president Donald Trump’s victory in the New Hampshire Republican primary bringing him closer to a rematch with Democrat President Joe Biden. JPMorgan’s Global Head of Digital Markets Eddie Wen said greater focus this year on macro and risk events may create short-term volatility, with particular focus on the release of U.S. monthly jobs and inflation numbers.

Recession fears, which topped last year’s survey, fell to third place at 18% as economic growth beats expectations, the survey said.

War in Europe, where Russia’s invasion of Ukraine heads into its third year, and the Middle East, where the Hamas-Israel conflict is watched for signs of escalation, followed at 14%. Traders expected volatile markets to remain their top trading challenge, but the share of respondents putting it in first place dropped 18 percentage points from last year to 28%. Liquidity availability neared the top of the list of trading challenges at 24%, up from 22% last year, while access to liquidity remained traders’ biggest market structure concern.

Chi Nzelu, global head of macro e-Trading at JPMorgan, said as electronic trading grows in prominence, having consistent access to liquidity across a breadth of providers was becoming more important to investors.

“They want to know that it will continue to be reliable even in shock times, which has broadly been the case across different markets in recent years,” he said.

Traders in credit markets and cash equities named liquidity availability as their top challenge.

“The market structure within the credit markets is becoming more complicated,” said Wen.

“There are more trading platforms to support trading of corporate bonds alongside the emergence of portfolio trading, bloc trading, larger trades, all now becoming more electronic over time.”

This meant selecting the best way to execute trades was becoming a key question for investors, he said.

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