The following article, originally published at 6:17 p.m. on Wednesday, Nov. 9, 2016, has been updated with market data and analysts' comments.
One constant in American life is change, former Treasury Secretary Henry Paulson observed just after the ballooning financial crisis led to the near failure of investment bank Bear Stearns in early 2008. Nowhere is that more evident than in the financial markets.
What Paulson, who was focused at the time on the risks spiraling out of the $14.8 trillion mortgage market, didn't mention was that change can be a money-maker under the right circumstances.
That was the case after British voters unexpectedly decided to pull out of the European Union in a late June referendum, driving up fixed-income trading volume and revenue at the biggest U.S. banks during July, August and September. And the phenomenon may well repeat itself after real estate mogul Donald Trump's surprise victory against Democrat Hillary Clinton in the U.S. presidential election.
As with the so-called Brexit vote, polls and odds-makers had predicted the exact opposite. Since Trump's policy stances haven't been nearly as firmly developed as Clinton's, and their effect on the U.S. economy -- the world's biggest -- is largely unknown, the effect of his growing lead on Tuesday night and eventual win was immediate.
The shift is "going to be good for volatility, and volatility will drive market volumes," R.J. Grant, director of equity trading at brokerage Keefe, Bruyette & Woods, said in a telephone interview Wednesday. "We are seeing a pretty intense pickup in activity this morning, and we are expecting that to remain the case for quite some time."
The volume of currency trades on JPMorgan Chase's (JPM) Asia desk was about six times the normal volume on Wednesday, according to a person familiar with the operation. That was similar to the Brexit volume at the New York-based bank, which had assigned a few dozen traders in New York to help its Asia operations handle any volume spikes, and it was smoother. No e-commerce issues or pricing disruptions were reported.
Trades on the BrokerTec fixed-income platform were $177 billion, shattering the Brexit volume of $131 billion, the person said, and gold-trading volume was three times the level reached during Britain's vote. Yields on U.S. 10-year Treasury notes surged by the most in three years.