NEW YORK (REUTERS) - Job cuts and constrained hiring are expected to continue on Wall Street in 2016, with bonuses likely to be lower than in 2015 due to difficult market conditions, according to a study by compensation consultant Johnson Associates.

The study said market activity, the US presidential elections and uncertainty about interest rates and world markets would play key roles in deciding incentive pay.

The forecast for 2016 follows a year in which Wall Street added jobs for the first time in five years and the bonus pool increased 3 per cent.

Wall Street banks have had a brutal start to 2016, with the KBW Global Nasdaq Bank index down nearly 19 per cent on concerns about profitability.

Almost 70 per cent of major global banks are trading below tangible book values, or what they would be worth if liquidated. Analysts say if this continues, banks will need to further cut costs.

Wall Street banks have been slashing employee compensation and cutting jobs as the commodities market downturn and near-zero interest rates have limited their ability to boost profits.

The study said employees involved in underwriting were likely to earn 15-20 per cent less in incentives in 2016 than in 2015 due to a drop in activity, especially in equity underwriting.

Advisory incentives are expected to fall 10-15 per cent.

Incentives for employees in sales and trading could fall by up to 20 per cent, while those in fixed income trading are expected to receive 15 to 20 per cent less.

Retail and commercial banking staff could buck the trend and see a 0-5 per cent rise in bonuses, helped by solid deposit and loan growth through the year, the survey said.