Morgan Stanley Fixed-Global Macro Commentary October 2-110576067

M Update Global Macro Commentary | GlobalOctober 2Morgan 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 David CuevaStrategist David.Cueva@morganstanley.com +44 20 7425-2143 Morgan Stanley & Co. LLCHeather BergerEconomist Heather.Berger@morganstanley.com +1 212 761-2296 USD/JPY rises 2.0% amid comments implying a less hawkish BoJ; USTs bear-steepen after ADP employment beat; OAT/Bund spread narrows amid fiscal policy initiatives; EUR/HUF breaks above 400; ECB members warn about downside risk to growth; DXY at 101.63 (+0.4%); US 10y at 3.781% (+4.9bp).• USD/JPY rises 2.0%, with the move supported by BoJ Governor Ueda’s reiteration of a less hawkish BoJ stance and the new Prime Minister Ishiba stating that the Japanese economy is not yet ready for further rate hikes. • USTs bear-steepen in a reversal of Tuesday’s risk-off rally, further aided by an upside surprise in ADP employment growth ahead of the highly anticipated nonfarm payrolls release.• EUR weakens 0.2% and the OAT/Bund spread narrows as French President Macron endorses a temporary tax on large French companies, supporting the government’s strategy to lower the deficit.• The NBH pledges to maintain “disciplined and tight” monetary policy as EUR/HUF (+0.6%) rises further, breaking above 400, with the forint reaching its weakest level in nearly a year and a half.• ECB policymakers are cautious of downside risks to the euro area economy, with Executive Board Member Schnabel warning that officials “cannot ignore the headwinds to growth” and Vice President de Guindos acknowledging that Europe is in a low-growth situation.The next Global Macro Commentary will be published on Friday, October 4. Please refer to our latest Global Macro Strategist (The Inflation Ouroboros), as well as our recent publications and collaborations (Poland Economics and Macro Strategy: NBP Review: Keeping a Steady Hand).Developed Markets United States: It was a quiet session on Wednesday with limited global data releases and macro catalysts. The risk-off sentiment that overtook market participants on Tuesday amid heightened geopolitical tensions reversed course, and there was a sell-off in global duration.In the NY morning, the ADP employment data showed that US companies added more jobs than expected in September, which further accelerated the move higher in UST yields. The labor market is of key focus this week, as this data came after an 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