Morgan Stanley Fixed-Global Macro Commentary May 29-108449062.pdf

M23ExhibGlobalMacroCommentary|NorthAmericaMay29MorganStanley&Co.LLCAlexandraMaierStrategistAlexandra.Maier@morganstanley.com+1212761-0428MartinWTobias,CFAStrategistMartin.Tobias@morganstanley.com+1212761-6076ZoeKStraussStrategistZoe.Strauss@morganstanley.com+1212761-0407LenoyDujonUS/CanadaEconomistLenoy.Dujon@morganstanley.com+1212761-2779MorganStanley&Co.Internationalplc+Marie-AnaisCFrancoisStrategistMarie-Anais.Francois@morganstanley.com+44207425-1877MorganStanleyMUFGSecuritiesCo.,Ltd.+HirokiYagiResearchAssociateHiroki.Yagi1@morganstanleymufg.com+8136836-5412MorganStanleyAsiaLimited+GekTengKhooStrategistGek.Teng.Khoo@morganstanley.com+8523963-0303Globalratescontinuetobear-steepen;BoJ"sAdachi"sremarksonpolicyboostJPY;upsidesurpriseinAustralianCPIsendsACGByieldshigher;S&PupgradesIndia"soutlooktopositive;DXYUSDIndexabove105;globalequitiesfall;DXYat105.11(+0.5%);US10yat4.612%(+6.2bp).•3t12andmostglobalratescontinuetobear-steepenabsentclearcatalystsforcurvemovement;30yyieldsrise7bp,tohighestlevelinnearlyamonth.•M457892:0US082T97yDBR1remarksthatamonetarypolicyresponseispossibleshouldprolongedJPYweaknessinfluenceinflationexpectationsboostJPY;3tK6JGfallsto156.92intradaybeforeretracingmoves.•Upsidesurprisein2TA1C87NB7Z2XJY2forAprilmarksthethirdconsecutiveincreaseininflationdataandsendsT3K2bondshigher;10yyieldsrise14bp.•#H10y2paresearlierlossesastFJrevisesoutlookonYZ9B722fromstabletopositive.•USDsurgesalongsidehigherglobalyieldsandrenewedhigher-for-longerpolicyratefears;KOG23tK2YZ90L(+0.5%)closesabove105.•Highersovereignbondyieldsweighonglobalequities,withmostmajorindicesclosinginthered(tFJ2MII:-1.1%;WA852tC5LL2():-1.3%;VBaa0B:-0.8%).Pleaserefertoourrecentpublicationsandcollaborations(GlobalMacroData:USLiquidRatesTracker;GlobalMacroData:JapanMacroDataTracker-2024/05/29;GlobalMacroData:UKRatesMonitor-May,29,2024).K0e0N5w092:78a0C1UnitedStates:Ongoingfearsofhigher-for-longerpolicyratescontinuedtosendglobalyieldshigher.Overnight,USTscontinuedtobear-steepenalongsideEuropeanduration,andthesteepeningacceleratedintotheNYmorning,absentanyclearcatalystsorfirst-tiereconomicdatareleases.AftertwopoorauctionsonTuesday,marketparticipantseagerlyawaitedtheresultsofthe7yUSTauctionasyieldsclimbedhigherintotheNYafternoon.Onceagain,anMorganStanleydoesandseekstodobusinesswithcompaniescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanleyResearch.InvestorsshouldconsiderMorganStanleyResearchasonlyasinglefactorinmakingtheirinvestmentdecision.Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoFINRArestrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.May29,202411:17PMGMTMUpdate2auctionwasmetwithlowdemandasthe7ystoppedoutat4.650%,a1.3bptail.Aslightriseinin