Progress Software Corporation (PSC) believes the U.S. and U.K.'s dominance of financial markets may be on the wane in 2011, according to a recent press release by the organization itself. Its Chief Technology Officer Dr. John Bates said, "High frequency trading (HFT) and algorithmic trading are taking off in emerging markets such as Brazil and India, possibly signaling the end of US and UK dominance in financial markets. Plus, HFT and algorithmic trading in the US and the UK will wane as regulatory arbitrage forces large banks and hedge funds to trade in - or move to - more lightly regulated regimes."

Acccording to its press release, Progress Software's Capital Markets Predictions for this year are the following:

1. Bye-bye status quo. High frequency and algorithmic trading will blossom in new markets such as Brazil and India, possibly signaling the end of US and UK dominance in financial markets. HFT and algorithmic trading in the US and the UK will wane as regulatory arbitrage forces large banks and hedge funds to trade in - or move to - more lightly regulated regimes.
2. Splash crashes. Increased interdependence of asset classes can lead to cross asset flash crashes - creating a domino effect where the crashes 'splash' across asset classes. As asset classes outside equities - energy, commodities, FX, derivatives - become increasingly automated there will be more flash crashes.

Learn about Progress' other predictions now!