Inflation Expectations and Pandemic Recovery to Drive Trading Volumes

Since its outbreak, the pandemic has hit the global economy hard: unemployment has risen due to company closures and lockdowns resulting in significantly reduced economic activity. However, signs of an economic recovery are encouraging. This is echoed by the recent Trader Survey conducted by the Swiss stock exchange. The survey among 1,900 registered traders across Europe in Q2 2021 revealed that they expect a post-Covid recovery to drive trading activity for the remainder of the year.

Tony Shaw, Executive Director London Office and Head Sales UK & Ireland of SIX Swiss Exchange comments: “Traders express optimism on the positive market momentum, as the global economy seems to pick up faster and stronger than expected. If trading activity increases as traders expect, the Swiss stock exchange will be ready and waiting.”

The only factor traders expect to have an even bigger impact on trading volumes is inflation. Half of all respondents said inflation might drive volumes in the second half of the year. This echoes broader concerns expressed by central bankers and economists.

Tony Shaw adds: “Supply bottlenecks and surging commodity prices increase the risk of inflation. By ensuring orderly trading and price formation on our exchange – as we have done throughout the pandemic – we’re allowing market participants to efficiently manage this and other risks. Open markets are crucial for traders and investors alike to cope with any kind of market volatility by adjusting their views and being able to act on it.”

The crisis has emphasised how important stability is in uncertain times, and SIX Swiss Exchange has proven to be a reliable partner. In the survey, traders named the stability as well as the efficiency of the trading infrastructure as crucial in ensuring that trading remained possible during this difficult time.

Traders expressed notable optimism about the outlook on business growth. Compared to the last survey, 40% of respondents now expect to see more growth over the next three years (up from 18% at the end of 2019), while only 5% expect less growth (down from 14% in 2019).

Opinions have also shifted with regards to staff hirings, as there are now more traders expecting new hirings (13%) than headcount cutbacks (10%), which contrasts with the results of 2019.

Comparing the feedback from the survey conducted in Q4 2019 with the same target group, results show that traders were more concerned with factors such as the US election, Brexit or the global recession; in contrast, the upcoming German election is not expected to move markets.

Asked about the return to the office, the largest fraction with 40% expects a balanced approach, while only about a quarter of respondents expect a return to normal. 

Following a challenging year marked by growth and records, the Swiss stock exchange is proud to have been named Exchange Group of the Year at the Financial News Trading & Tech awards 2021. “As a leading listing and trading destination, SIX Swiss Exchange seeks to engage in dialogue with its stakeholders, fuel debates and get a deeper understanding of clients’ needs and market trends, to address current issues and shape the financial industry”, Tony Shaw points out.

• Sparks - The New Segment Exclusively for SMEs
• Future of Exchanges: Opportunities and Challenges in Europe
• Traders Predict Digital Assets and AI Are Poised to Reshape the Trading Industry