BofA Global FX weekly Breadth test 2026 10 09

G10 FX. Equity breadth matters for USD even controlling for the level & rates effect. FX Research Ongoing narrow rally supports USD; transition to broader rally or narrow sell-off, less so. Global

EM FX. Back to zero: lessons learnt and opportunities ahead. Waiting for cleaner Table of Contents positioning. Seek carry & RV trades away from USD until then. Key views, forecasts and latest trades 2 G10 Themes Week ahead 3 JPY. End (pause) to AI rally + faster BoJ hikes could support JPY during offshore hours. The view 4 G10 Themes 7 EUR. OAT-Bund spreads may explain c60% of EUR-USD weakness over the past month. The yen after dark, the yen at dawn 7 EURCHF skew screens stretched – we recommend fading. EUR – France and other near-term themes 8 Fade EURCHF skew 9 JPY: No large-scale French bond selling expected. USD/JPY risks skewed to downside. Japan BoP: The yen also rises 10

EM Themes EM Themes 12 Short CNH, Long TWD – Funding AI 12 Short CNH/ Long TWD: funding AI reflation reflation 12 Asia FX: divergent trading themes Asia FX: Divergent trading themes 14 BRL – Election post-mortem 17 BRL: Brazil election post-mortem COP trip notes: Taking the bull by the 20 COP: trip notes- Taking the bull by the horns horns 20 CEE trip notes: long convergence, fade 21 CEE FX: trip notes - long convergence, fade mispricing mispricing 21

Quant & Vol Insights Quant & Vol Insights 22

EUR sell-off not done yet. EUR has broken YTD lows; quant signals favour chasing lower. Technical Strategy 23

French risks, option flow, trend and event analysis all favour EUR downside. EURGBP Trade Recommendations G10 24

downside is supported by both signals, fundamentals, technicals. Trade Recommendations EM 26 World At A Glance Projections 29 Technical Strategy Research Analysts 34 DXY at 18-month highs seeks a close above 200wk SMA to confirm upside. We favor USD longs vs CHF, EUR, SEK, GBP and PHP as bullish patterns broaden. G10 FX Strategy MLI (UK) Adarsh Sinha FX and Rates Strategist MLI (UK) Claudio Piron Emerging Asia FI/FX Strategist Merrill Lynch (Singapore) See Team Page for List of Analysts

Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 29 to 31. Analyst Certification on page 28.

Key views, forecasts and latest trades Michalis Rousakis Claudio Piron MLI (UK) Merrill Lynch (Singapore)

Exhibit 1: Our medium-term views G10 and EM FX medium-term views G10 We continue to expect EUR-USD at 1.15 by year-end and 1.20 by end-2027. US macro data remain reasonably solid, with unemployment around 4% and growth running at roughly 2%. However, risks continue to accumulate for already nervous markets, including the ongoing Iran war and associated supply shock, rising concerns about the existential risks posed by AI, the apparent intractability of fiscal challenges, renewed trade tensions and, of course, the upcoming US midterms. On the EA side, activity data have surprised to the upside and the ECB has sought to preserve its inflation-fighting credentials. Nevertheless, high energy prices and developments in France remain key downside risks in the near term. We remain bullish on JPY, forecasting USDJPY at 149 by year-end, supported by improving JP fundamentals and our expectation of faster BoJ hikes. Elsewhere, we maintain a constructive medium-term view on GBP but prefer to await greater clarity on UK policies. We remain constructive on AUD and NZD, with a preference for AUD in the near term. We also retain a bullish bias on SEK, while leaning bearish on NOK, CAD and CHF. EM EM FX performance remains variable, but NE Asia FX is making a comeback with KRW leading on strong export…