Morgan Stanley Fixed-Global Macro Commentary October 8-110701255

M Update Global Macro Commentary | Global October 8Morgan 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 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 China does not unveil new stimulus measures; CSI 300 maintains gains; USTs bull-steepen amid expectations of Fed easing; ECB's Nagel is open to an October cut; solid 30y auction supports long-end JGBs; Korea to be included in WGBI Bond Index; DXY at 102.48 (-0.1%); US 10y at 4.012% (-1.4bp).• The NDRC press conference seemingly falls short of market participants’ expectations as it did not unveil any new major stimulus plans and did not mention the size of the fiscal package.• USD/CNH gains as much as 0.5% intraday given the lack of a fiscal announcement at the NDRC press conference, but eventually finishes the Tokyo session lower by 0.2% as onshore equity markets manage to hold onto gains (CSI 300: +5.9%).• Front-end UST yields (2y: -3bp) are supported with commentary from several Fed members who reassure market participants that the Fed’s baseline is to continue easing the policy rate toward neutral.• ECB Governing Council Member Nagel says the Bundesbank is not expecting any growth in the German economy and even possibly sees a recession; on the ECB policy rate path, Nagel states he is not ruling out an October rate cut.• A solid 30y JGB auction prompts a rally in long-end JGBs while front-end JGBs are unchanged on a simple yield basis, as Japan cash earnings data remain strong. • After markets close, FTSE Russell announces that it will add South Korea to the WGBI Bond Index.Please refer to our latest Global Macro Strategist (A Phoenix from the Ashes?), Global EM Strategist (Recalibrating) as well as our recent publications and collaborations (EM Strategy: Asia Macro Strategy: Are Chinese Exporters Ready to Buy CNY?; LatAm Macro Strategy: Avoiding Directional FX Risk into November; EM Strategy: The GBI-EM Investors' Lowdown).Developed MarketsUnited States: Overnight, the NDRC press conference announced policy measures but offered insufficient guidance, relative to market participants’ expectations, on further fiscal stimulus. While onshore China equities managed to hold onto their gains, the disappointing outcome resulted in a slight risk-off environment that weighed on risk-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