MNI: On Wednesday BofAML wrote that "the Fed will....>

MNI: On Wednesday BofAML wrote that "the Fed will very likely cut rates on 31

July or 18 September. The market is fully priced for this. We think that history

can provide useful context for how to position this summer into the impending

easing cycle. Accordingly, we use (1) a market price-based approach using

signals recently generated by the US front-end; and (2) a timing-based approach,

whereby Fed cuts are assumed to occur at a defined point in the future (July or

September meetings) as the basis for identifying top performers. Results

intuitively suggest a portfolio of short USD and long US fixed income. Within

G10 FX, we find unexpected heterogeneity, suggesting the importance of pair

selection. Historically, EUR/USD tends to rise strongly with favorable

probability over approximately the next 2-3 months, irrespective of approach. We

therefore think it could be the best way to express a bearish USD view. The

outlook for high-beta FX pairs - which track equities and volatility - seems

sensitive to Fed cut proximity. A later September cut would argue against these

risky expressions short-term."