The Traders’ perspective
BofA Global Research highlights that liquidity and positioning unwinds are driving significant FX and rates market volatility, though no specific currency is mentioned.
What the desk is arguing
BofA's G10 rates and FX trading desk, led by Ralf Preusser, emphasizes that recent market gyrations are largely attributable to liquidity and positioning unwinds. The discussion suggests that crowded trades are being rapidly exited, amplifying volatility across G10 FX and rates markets.
Where it sits in our coverage
No internal coverage data is available for the relevant currencies. The desk's view is qualitative, focusing on positioning dynamics rather than specific currency levels or targets. Our firm's consensus and spread cannot be computed without currency-specific data.
How other firms see it
No other firm commentary was provided for this analysis. The excerpt is from a BofA podcast, and no opposing or confirming views from other firms are included.
Key takeaways
- 01Liquidity and positioning unwinds are key drivers of recent FX and rates volatility.
- 02Crowded trades are being rapidly exited, amplifying market gyrations.
- 03No specific currency pairs are identified in the commentary.
Market implications
Heightened volatility in G10 FX and rates markets is expected to persist as positioning unwinds continue. Traders should monitor liquidity conditions and be cautious of rapid reversals in crowded trades.
Risks to this view
Further liquidity deterioration could lead to erratic price moves. Repositioning may catch leveraged players off guard, causing cascading stops. The absence of specific currency focus limits actionable trade triggers.
Please join Ralf Preusser in conversation with G10 rates and FX trading to discuss positioning and market liquidity. In this podcast Ralf and team will discuss how liquidity and positioning unwinds have contributed to considerable gyrations in FX and rates 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. ©2026 Bank of America Corporation. All rights reserved.
Sources & References
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