Global Research Unlocked

Ralf Preusser is joined in discussion by Adarsh Sinha and Mark Cabana. We will review the outlook for US rates and the US dollar after this week's FOMC meeting. We also analyse the motivation and implications behind the Fed’s new Reserve Management Purchases. Finally, we will also discuss the dramatic repricing of the policy outlook for the RBA, preview next week's BoJ meeting and outline our views on GBP.   You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.   "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2025 Bank of America Corporation. All rights reserved.

Solar, Storage, and Nuclear: The Next Clean Tech Wave Surging AI demand is creating volatility and speed-to-power challenges, while grid delays push onsite generation forward. Our Clean Tech Symposium highlighted a major shift in data center power strategies, with the percentage of facilities using onsite gas potentially doubling in the short term. But, its role as bridge vs. temporary depends on economics: transmission and distribution (T&D) spend >$100B annually and pricing trends closer to $6/MMBtu. Solar-plus-storage remains highly cost-competitive with battery prices down 40-50%, reinforcing its position in future portfolios. Nuclear small modular reactors (SMRs) are progressing with faster timelines, though commercialization is years away and cost certainty remains low. Power availability is now shaping data center site selection, where Dimple sees solar + storage and nuclear as complementary long-term solutions.    You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.   "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2025 Bank of America Corporation. All rights reserved.

Meghan Swiber, a Senior US Rates Strategist, and Mark Capleton, the Global Head of Inflation-Linked Strategy, dive into the future of inflation markets. Meghan discusses potential Fed rate cuts driven by unemployment concerns, while also addressing Powell's data dependence. Mark warns about persistently low euro inflation and highlights the anomaly in the US-Euro long-term inflation spread. They analyze the impact of the UK budget on breakevens, suggesting it could make medium-dated options more attractive. Tune in for their expert insights!

David Tinsley, Senior Economist at the Bank of America Institute, and Ashley Wallace, Head of the EMEA Consumer Discretionary Team at BofA Global Research, dive into the latest trends in employment and luxury spending. They discuss the notable wage growth gap between lower and higher income earners, emphasizing challenges for low-income consumers. Meanwhile, luxury spending is experiencing a resurgence, particularly in fashion and jewelry. The guests explore how stock market trends may influence future luxury demand and the resilience of high-income shoppers amidst potential market fluctuations.

Join Stephen Juno, a US economist, as he analyzes the recent September labor market data, highlighting modest job gains and rising participation rates. Mark Cabana, Head of US Rate Strategy, shares market positioning insights, advocating for a mix of hawkish and dovish strategies in response to Fed policies. FX strategist Alex Cohen discusses dollar fluctuations influenced by rates and equities, noting a potential return of the dollar smile. The trio dives into implications for the economy and upcoming Fed decisions.

Alec Stranahan, a biotech analyst from BofA Global Research, Vivek Arya, a tech analyst focused on semiconductors, and Brad Sills, a software analyst, dive into the transformative role of AI in healthcare. They discuss how AI is addressing inefficiencies, with use cases like automated note-taking and connected care through wearables. Vivek highlights the implications for the semiconductor industry as compute demands rise, while Brad outlines how software innovation supports AI integration in healthcare workflows. Together, they paint a picture of a rapidly evolving landscape.

Investments from the US gov't make this time different The recent US-China agreement may secure short-term access for rare earth elements, but it doesn't alter the strategic need for domestic supply chains. Lawson and Michael highlight the complexity, cost, and time required to build out mining, midstream, and magnet-making capacity, highlighting that China's success today is a result of a commitment made back in the 1980s. US initiatives, including Department of War programs, US government investment and EXIM Bank support, are injecting real funding into projects, critical given that some of these projects are single-asset, but progress takes time. Michael also discusses the copper and aluminum markets, where structural demand growth meets a difficult supply situation, leading to higher production costs in the case of aluminum.   "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2025 Bank of America Corporation. All rights reserved.  

Ali Panani, Head of UK Economics at BofA Global Research, discusses the limited fiscal headroom and challenges in consolidating budgets without hindering growth. Agnes Stengarait analyzes gilt issuance implications and market reactions post-budget, emphasizing short-term rate pricing. Kamal Sharma dives into sterling dynamics, examining why the currency fell despite rising yields and what could help its stability. The trio provides a deep dive into the UK's financial landscape, revealing insights crucial for understanding future market moves.

Tariffs imposed under the International Emergency and Economic Powers Act (IEEPA) account for about 9.5pp of our estimated 14.7pp effective tariff rate after the reduction in fentanyl tariffs on China. Therefore, the Supreme Court's decision could have important implications for activity, inflation, deficits, debt, interest rates, and the dollar. We discuss risks and scenarios after the oral hearings. As expected US Treasury maintained nominal coupon sizes unchanged but also did not guide towards higher bill share. Instead guidance suggests appetite to grow coupon supply in 2027. We discuss scenarios and implications for the US rate and spread curve.   You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.   "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2025 Bank of America Corporation. All rights reserved.

We discuss the FOMC rate and QT decisions. US front-end rates now look much more fairly priced. QT decision disappointed us and we remain concerned about US funding markets. ECB meeting was a non-event, but Euro Area data surprises on both activity and inflation mean that the hawks will likely retain the narrative into the December meeting. We outline what this means for our ECB call and why we still see value in EUR rate markets. You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life. "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2025 Bank of America Corporation. All rights reserved.