Morgan Stanley Fixed-Global Macro Commentary September 30-110544366

M Update Global Macro Commentary | Global September 30Morgan Stanley & Co. LLCAlexandra MaierStrategist Alexandra.Maier@morganstanley.com +1 212 761-0428 Zoe K StraussStrategist Zoe.Strauss@morganstanley.com +1 212 761-0407 Morgan Stanley MUFG Securities Co., Ltd.+Hiroki YagiResearch Associate Hiroki.Yagi1@morganstanleymufg.com +81 3 6836-5412 Morgan Stanley Asia Limited+Min DaiStrategist Min.Dai@morganstanley.com +852 2239-7983 Morgan Stanley & Co. International plc+David CuevaStrategist David.Cueva@morganstanley.com +44 20 7425-2143 Chair Powell sees two more 25bp cuts this year; ECB's Lagarde will take increased confidence into account at October meeting; soft German CPI; BanRep cuts by 50bp; Fed's Bostic open to another 50bp cut; Fed's SRF rises to $2.6bn; DXY at 100.76 (+0.4%); US 10y at 3.781% (+3.0bp).• USTs bear-flatten after Fed Chair Powell says that downside risks to the US economy have eased and reiterates that his base case is for two more 25bp cuts this year as the Fed lowers rates “over time.”• EUR weakens -0.3%, weighed down by broad USD strength and ECB President Lagarde's comments that she is more confident in inflation returning to target in a timely manner, and will take that increased confidence into account at the October ECB meeting. • Strong regional German CPI data spurs a cheapening in European duration, but Bunds retrace the weakness after a downside surprise in German CPI and dovish remarks from Lagarde.• In a 4–3 vote split, Banrep lowers its policy rate by 50bp as expected; COP weakens -0.7% against the USD as the vote split leans dovish, with three members favoring a 75bp cut.• Atlanta Fed President Bostic says he is open to another 50bp cut in November if the labor market shows weakness, even though he was one of the policymakers who penciled in just one more 25bp cut for the year in the September SEP.• Usage of the Fed’s Standing Repo Facility (SRF) rises to $2.6bn, the highest level since July 2020 in what could be indicative of some strain in funding markets.Please refer to our latest Global Macro Strategist (The Inflation Ouroboros), as well as our recent publications and collaborations (ECB Preview: Next Stop: Below Neutral; Global Macro Strategy: Global FX Positioning: Short USD Positioning Bias Retained; Zambia Sovereign Credit Strategy: The Stars Are Aligning; Colombia Economics and Strategy: Central Bank Review: Shifting Gears?; Latin America Economics, Equity and Fixed Income Strategy: Back from Mexico; Green shoots, lingering risk).Developed Markets United States: Overnight, bear-flattening pressures overtook global duration. In Japan, as 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