Morgan Stanley Fixed-Global Macro Commentary September 25-110485663

M Update Global Macro Commentary | Global September 25Morgan Stanley & Co. LLCAlexandra MaierStrategist Alexandra.Maier@morganstanley.com +1 212 761-0428 Zoe K StraussStrategist Zoe.Strauss@morganstanley.com +1 212 761-0407 Lenoy DujonUS/Canada Economist Lenoy.Dujon@morganstanley.com +1 212 761-2779 Morgan Stanley & Co. International plc+Lorenzo TestaStrategist Lorenzo.Testa@morganstanley.com +44 20 7677-0337 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 Morgan Stanley & Co. International plc+David CuevaStrategist David.Cueva@morganstanley.com +44 20 7425-2143 Riksbank cuts by 25bp; USTs cheapen led by the belly; long-end JGBS outperform following BoJ purchase operation; OAT/Bund spread widens; Korea rates bull-steep amid dovish BoK comments; Australia CPI falls back into RBA target range; DXY at 100.93 (+0.5%); US 10y at 3.785% (+5.7bp).• Riksbank lowers rates by 25bp, as expected, but forward guidance signals more and potentially even larger cuts to come, with Riksbank Governor Thedéen noting a 50bp rate cut would be consistent with a "gradual approach"; USD/SEK gains 0.9%. • USTs maintain the overnight cheapening in a catalyst-light session, with underperformance in the belly of the curve (5y: +6bp) given heavy corporate issuance and an on-the-screws 5y UST auction.• JGBs twist-flatten as rates rally in response to a less hawkish BoJ and the long end outperforms (30y: -3bp) following a particularly strong result for the 10-25y BoJ JGB purchase operation.• French OATs underperform after the government warns that the deficit may have widened more than expected; OAT/Bund spread closes 2bp wider, with the rest of the EGB complex following the move.• Korea rates bull-steepen (1y: -4bp) alongside weakness in the equity market (KOSPI: -1.3%), with the move aided by dovish comments from the BoK that fuels talk of an October rate cut. • Australia CPI falls back into the RBA target range for the first time in three years, but Australia rates and AUD are little impacted as the move lower was in line with expectations and broadly driven by temporary government subsidies.Please refer to our latest Global Macro Strategist (Ground Control to Major Dove), Global EM Strategist (A Cut Above), as well as our recent publications and collaborations (Nordic Macro Watch | Riksbank: Falling Leaves, Falling Rates).Developed Markets United States: In Asia, the momentum from the China stimulus package continued; Asia equities gained, iron ore prices once again surged, and USD/CNH briefly broke below 7.0. This came alongside an expected reduction in the 1y medium-term lending facility (MLF) rate. However, the impact on global markets faded on Wednesday, with the Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result