Morgan Stanley Fixed-Global Macro Commentary September 6-110224035

M Update Global Macro Commentary | Global September 6Morgan 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.+Hiromu UezatoResearch Associate Hiromu.Uezato@morganstanleymufg.com +81 3 6836-8431 Morgan Stanley Asia Limited+Gek Teng KhooStrategist Gek.Teng.Khoo@morganstanley.com +852 3963-0303 August payrolls miss alongside fall in unemployment; USTs bull-steepen after struggling to digest NFP; Fed's Waller would support front-loading cuts; CAD weakens amid weak Canada labor data; risk assets fall; PHP and TWD outperform in region; DXY at 101.19 (0.1%); US 10y at 3.708% (-1.9bp).• US August employment report contains a miss in the headline payrolls figure with notable downward revisions to the prior two months, but the unemployment rate ticks down to 4.2% (P: 4.3%).• USTs struggle to find footing as market participants digest nonfarm payrolls data and fedspeak, which are unable to provide clear evidence on the magnitude of Fed cuts to come; USTs ultimately bull-steepen with the 2s10s curve disinverting as 2y yields reach their lowest level since 2022.• Fedspeak leaves a 50bp cut on the table with Fed Governor Waller stating he would be “an advocate of front-loading rate cuts,” if appropriate; intraday STIR pricing implies as much as a 50% probability of a 50bp cut in September, only to unwind and price in ~30% chance by the end of the session.• CAD weakens -0.5% against the USD as the currency is weighed down by Canada labor data with a higher-than-expected rise in the unemployment rate alongside a drop in full time employment.• Risk assets interpret the US labor data as a bad sign for the economy with the S&P 500 (-1.0%) having its worst week since March 2023, high yield credit spreads widening, and brent crude oil futures tumbling lower (-2.2%).• PHP and TWD outperform AxJ peers ahead of US labor data, strengthening 0.6% and 0.5% against the USD alongside gains in their local equity markets.Please refer to our recent publications and collaborations (Snippets from China: Special Snippets from Beijing; EM Fixed Income Flows Update: Where Supply Meets Demand; Podcast | Global: The Global Macro Guide: September 6).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 certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.+= Analysts employed by non-U.S. affiliates