Global Rates Weekly From Jackson to action

Global Rates Weekly From Jackson to action

18 September 2026 The View: Beyond the Fed The BoJ decision due this morning is the outstanding risk event of the week. We Rates Research maintain a bearish front-end bias via payers. Risk around the AU labor market report are Global asymmetric. We are short the front end and in flatteners. Table of Contents ─ R. Preusser Core views, trades and forecasts 2

Rates: True feathers The View 3 US: Warsh says policy isn't restrictive; pay 2Y and be in flatteners as the Fed tries to Rates – US 4 tighten financial conditions. Simple frameworks point to FF >5%. Rates – EU 6 Rates – UK 8 EU: We provide a quick update on Dutch PF data & summarise our view on 10y OAT- Rates – AU 10 Bunds: a break above 100bp is now possible, but the spreads should stay sub 115bp. Rates – JP 11 UK: Front-end remains significantly more hawkish than our read of the BoE reaction Rates – CA 13 function. QT overhaul behind market rally post-MPC. Front end – US 15 Special Topic – US midterms 17 AU: Hawkish RBA repricing intensified over the past week. We remain paid Sep RBA OIS Special Topic – UST buybacks 18 and recommend AU 2s10s flattener. Technicals 20 JP: BoJ balance sheet to shrink fastest among major CBs on QT & loan-support program Rates Alpha trade recommendations 21 runoff. Still, we see limited risk of higher money market rates through end ‘27. Global rates forecasts 25 Appendix: Common acronyms 26 CA: Inflation remained 3.0% yoy in Aug, still driven by gas prices. Core stayed at 2%. Research Analysts 31 ─ M. Cabana, M. Swiber, B. Braizinha, R. Axel, K. Craig, E. Xiao, S. Salim, E. Davidsson, A. Stengeryte, M. Capleton, O. Levingston, I. Hartstein, & T. Yamashita Global Rates Research MLI (UK) Front end: Corporate tax date drives MMF outflows Ralf Preusser, CFA Recent MMF outflows exacerbated by Sept corporate tax date, expected to be temporary Rates Strategist MLI (UK) Special Topic: US midterms & buybacks Mark Cabana, CFA Midterms: We expect the mid-terms are likely to be a muted risk event for US rates. A Rates Strategist BofAS divided Congress could see gridlock and result in limited new legislation.

Buybacks: Treasury activism may have richened UST 10s30s by up to 5-10bp vs other Sphia Salim Rates Strategist DM curves. We analyze Swiss long-end richening vs the broader DM curve. MLI (UK)

Technicals: US 10Y yield reached new cycle highs See Team Page for List of Analysts

In line with our view, the US 10Y yield reached a new cycle high. Post Fed, we allow some time for yield and RSI (momentum) to mean revert, then pay again.

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 28 to 30. Analyst Certification on page 27.

Core views, trades and forecasts Exhibit 1: Global rates trade quilt Views / trades in bold when changed / entered this week US EU UK CA JP AU Bearish front-end bias Pay Sep RBA OIS Duration Short 2y UST Receive 1y2y vs AU Bullish front-end bias Long bias Bullish long-end bias Pay 1y2y vs EUR Long 20y UST fly Steeper 2y-10y in Gilts CA 5s30s steepener vs Curve 2s10s flattener in options 2s10s flattener in options Flattening bias 2s30s flattener 15y-20y flattener US 5s30s flattener Long Dec26 SOFR/FF CORRA cheaper vs deposit Bases Sonia cheaper vs. Bank TONA below IOER Pay 2y 6s3s Long M7 3m SOFR/FF rate Long 1y5y EURi/sell payers Short 10y5y RPI vs US Real yield curve flattener Inflation Forward real flatteners Receive UKTi 35s-38s Long 10y20y infl. swap Closed Rec 1y5y real rates fwd real yield Long 2y ASW Short 10y German bonds vs Long low cpn 2y & 7y Gilts on Short front-end spreads Tighter semi and ACGB…