Global FX weekly Raise you a hawk

Global FX weekly Raise you a hawk

G10 FX. Fed raises the hawkish bar but not the USD ceiling. Still yen bulls but watch for FX Research BoJ dissents. US-China stability mitigates an upside USD risk. Global

EM FX. Emerging cracks: crowded carry trades, bearish trends and higher US yields raise Table of Contents downside risks, especially for low-yield Asia FX. Key views, forecasts and latest trades 2 G10 Themes Week ahead 3 FOMC review. We stick with our call for two more hikes this year, in Oct and Dec. The view 4 G10 Themes 7 AUDNZD. Election uncertainty meets a farmgate windfall. Sep FOMC review: Hike first, ask questions later 7 SNB preview: on hold and still committed to intervene in FX markets. AUDNZD: Election Uncertainty Meets a Farmgate 8 Windfall Nordic previews. Riksbank on hold & hawkish tilt. Norges on hold but finely balanced. SNB preview: comfortably on hold 9

DKK. Drivers of weak DKK. Nordic previews: on hold, with a tightening bias 10 Why is DKK so weak? 13 EM Themes EM Themes 14 Asia FX. Asia FX Monthly – Rally stalls on Fed & Oil Asia FX Monthly – Rally stalls on Fed & Oil 14 EM Asia - Assessing FX Core Strengths 15 Asia FX. Assessing Core Strengths KRW from last to pole position 17 KRW- from last to pole position MXN – Attractive carry (trip notes) 19 Quant & Vol Insights 21 MXN - carry remains attractive (trip notes) Technical Strategy 22

FX Quant & Vol Trade Recommendations G10 24 Trade Recommendations EM 26 Low vol masks key rotations: avoid broad ATM ownership; favor selective tails, surface shape and clear catalysts. Low-beta has repriced; favor JPY calendars and defined-payoff World At A Glance Projections 29

structures over outright vega. Rich EUR/GBP forwards favor selective asymmetry and Research Analysts 34

cheap CAD tails over broad long vega.

Technical Strategy G10 FX Strategy MLI (UK) The DXY’s post-Fed breakout confirmed a double bottom pattern on the daily chart. This

favors tactical upside toward 100.67 / 101.17 / 101.80 while above 99.16. Claudio Piron Emerging Asia FI/FX Strategist Merrill Lynch (Singapore) Adarsh Sinha FX and Rates Strategist MLI (UK) 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 30 to 32. Analyst Certification on page 29.

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 Following the July FOMC, we closed our short EURUSD trade recommendation. The July FOMC press conference injected uncertainty around the Fed’s inflation-fighting commitment, while the UST’s buybacks announcement added further pressure on the USD. However, Chair Warsh’s Jackson Hole speech, still-solid US data, and the escalation in the Middle East have supported USD and could continue doing so until the Euro area growth recovery gathers steam. We retain a constructive medium-term EUR bias but, in the near term, require greater clarity on the Fed’s reaction function. We are 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 positive 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 gains due to the AI investment boom, with long TWD also becoming popular. Our…