The third-quarter earnings season has proven to be largely positive for banks, mostly due to their fixed income trading bolstering their balance sheets.
JPMorgan beat analyst expectations this month, announcing fixed income revenues were up 48 percent on the year. Goldman Sachs crushed estimates, reporting that its fixed income, currency and commodities trading was the main driver, increasing 34 percent on year.
The same happened for Citigroup and Bank of America and European lenders, such as Barclays, have followed suit. And this trend could be set to continue, according to Jane Foley, head of FX strategy at Rabobank.
"It is possible that banks' profits will continue to be supported by fixed income. The increase in volatility may support the number of transactions and could lead to higher profitability for banks," she told CNBC.
Foley defends that political uncertainty in 2017 will lead to more volatility in bond markets. The uncertainty regarding the U.S. election might soon evaporate, but Europe faces key elections – including in Germany, France and the Netherlands, where rising support for nationalist parties is becoming stronger.