Morgan Stanley Fixed-Global Macro Strategist Ground Control to Major Dove-110414138

M Global IdeaGlobal Macro StrategistGround Control to Major DoveMorgan Stanley & Co. LLCMatthew HornbachStrategist Matthew.Hornbach@morganstanley.com +1 212 761-1837 Andrew M WatrousStrategist Andrew.Watrous@morganstanley.com +1 212 761-5287 Martin W Tobias, CFAStrategist Martin.Tobias@morganstanley.com +1 212 761-6076 Francesco GrechiStrategist Francesco.Grechi@morganstanley.com +1 212 761-1009 Zoe K StraussStrategist Zoe.Strauss@morganstanley.com +1 212 761-0407 Eli P CarterStrategist Eli.Carter@morganstanley.com +1 212 761-4703 Morgan Stanley & Co. International plc+James K LordStrategist James.Lord@morganstanley.com +44 20 7677-3254 David S. Adams, CFAStrategist David.S.Adams@morganstanley.com +44 20 7425-3518 Wanting LowStrategist Wanting.Low@morganstanley.com +44 20 7425-6841 Lorenzo TestaStrategist Lorenzo.Testa@morganstanley.com +44 20 7677-0337 Fabio Bassanin, CFAStrategist Fabio.Bassanin@morganstanley.com +44 20 7425-1869 Dominic J KrummenacherStrategist Dominic.Krummenacher@morganstanley.com +44 20 7425-9781 Morgan Stanley MUFG Securities Co., Ltd.+Koichi SugisakiStrategist Koichi.Sugisaki@morganstanleymufg.com +81 3 6836-8428 Hiromu UezatoResearch Associate Hiromu.Uezato@morganstanleymufg.com +81 3 6836-8431 Take your rate cuts and put your helmet on. Ground control to Major Dove. Commencing countdown, easing on. Ground control and Major Dove want a soft landing. More dovishness could come from weaker inflation, a weaker labor market, or both. That skew of risks keeps us in UST yield curve steepeners. Global Macro StrategyWe discuss the uncertainty surrounding the stance of monetary policy and the effect of its easing – especially given how easing will reduce interest income in the economy. We also discuss how a post-Fed "risk on" environment intersects with the risk-reward balance of the USD.Interest Rate Strategy In the US, we maintain UST 2s20s steepeners and maintain an outright received position in the November FOMC OIS rate. In the UK, we maintain SFIH5-H6 flattener, stay long SFIZ4 95.40-55-70 call fly, keep 10s30s gilt flattener, and short 15y ASW. In Japan, we shift from long 20y JGB vs. pay 2y OIS to long 20y JGB outright. We maintain JGB 5s10s ASW box flattener, and long 30y JGB ASW.Currency & Foreign ExchangeWe enter short EUR/AUD based on EU-Australian growth divergence and an increasingly more attractive carry-to-volatility ratio. We turn neutral on GBP and no longer recommend long GBP/CAD given stretched positioning and limited upside. We think the SNB is likely to under-deliver on the amount of cuts priced next week but shift its FX stance to target franc weakness, driving strength on the day followed by a reversal. In Sweden, we think the Riksbank is set to cut by 25bp next week and bring forecasts closer to market pricing, resulting in a muted reaction for SEK. We turn more constructive on CAD and enter a limit buy order for CAD/CHF. Inflation-Linked BondsWe initiate TIPS