Morgan Stanley Fixed-Global Macro Commentary September 3-110167190

M Update Global Macro Commentary | Global September 3Morgan Stanley & Co. LLCAlexandra MaierStrategist Alexandra.Maier@morganstanley.com +1 212 761-0428 Morgan Stanley & Co. International plc+Dominic J KrummenacherStrategist Dominic.Krummenacher@morganstanley.com +44 20 7425-9781 Morgan Stanley & Co. LLCLenoy DujonUS/Canada Economist Lenoy.Dujon@morganstanley.com +1 212 761-2779 Morgan Stanley MUFG Securities Co., Ltd.+Hiroki YagiResearch Associate Hiroki.Yagi1@morganstanleymufg.com +81 3 6836-5412 Morgan Stanley Asia Limited+Gek Teng KhooStrategist Gek.Teng.Khoo@morganstanley.com +852 3963-0303 Risk-off sentiment dominates price action; USTs bull-flatten amid soft ISM manufacturing; JGBs twist-steepen; stronger-than-expected Brazil 2Q24 GDP; downside surprise in Swiss inflation; ECB's Sinkus says cutting in October is "quite unlikely;" DXY at 101.76 (0.1%); US 10y at 3.831% (-7.2bp).• A risk-off sentiment dominates price action with a global duration rally, sell-off in equities (S&P 500: -2.1%), bid for safe haven currencies (USD/JPY: -0.9%), and drop in oil prices (Brent crude oil: -4.9%).• USTs bull-flatten following the broad risk-off tone with the richening aided by weaker-than-expected ISM Manufacturing as new orders fall to their lowest level of the year.• JGBs twist-steepen amidst a weak 10y JGB auction as 10y yields reach their highest level in over a month while the super long sector outperforms, rallying into Tokyo close.• Stronger-than-expected Brazil 2Q24 GDP, with growth of 1.4% q/q (C: 0.9%), sends swap rates on the January 2026 contract as much as 14bp higher intraday as market participants readjust policy rate expectations.• CHF (+0.1%) gains less than its fellow safe havens after Swiss inflation surprises to the downside, remaining below the SNB’s 3Q24 conditional forecast, which further supports the case for another rate cut. • ECB Governing Council Member Sinkus says he sees “quite a clear case” for a cut in September, but cutting in October or by more than 25bp in September seems “quite unlikely"; market pricing implies ~32% probability of an October cut.Please refer to our recent publications and collaborations (EM Fixed Income Strategy & Global Economics: US Election Implications for EM; Ivory Coast Sovereign Credit Strategy: Ivory Towers; Japan Macro Strategy: How to Position After the Recent Volatility?; G10 FX Strategy: Skew Gardens).Developed Markets United States: Following the long weekend in the US, a risk-off sentiment was the primary driver of Tuesday’s price action. While the strong risk-off tone lacked a clear catalyst, the Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.For analyst cer