Morgan Stanley Fixed-Global Macro Commentary October 7-110678984

M Update Global Macro Commentary | Global October 7Morgan 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 Morgan Stanley & Co. LLCLenoy DujonUS/Canada Economist Lenoy.Dujon@morganstanley.com +1 212 761-2779 Morgan Stanley MUFG Securities Co., Ltd.+Hiroki YagiResearch Associate Hiroki.Yagi1@morganstanleymufg.com +81 3 6836-5412 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 10y USTs close above 4%; STIR pricing implies less than 50bp of Fed cuts in 2024; JGBs bear-flatten; BI intends to intervene amid IDR weakness; Brent crude oil above $80/bbl; Fed's Kashkari says Fed has room to reduce its balance sheet; DXY at 102.49 (-0.0%); US 10y at 4.026% (+5.8bp).• USTs continue to bear-steepen in the aftermath of the strong labor data, with 10y yields closing above 4% for the first time since July, while the 2s10s curve briefly reinverts intraday.• Market participants reprice the Fed policy rate path, with less than 50bp of cuts priced for the remainder of the year, alongside a continued rise in the market-implied trough rate.• The JGB curve bear-flattens as front-end yields accelerate their sell-off after the BoJ’s regional economic report had all nine regions reporting that their respective economies had been recovering, reigniting talk around further BoJ rate hikes to come.• IDR (-1.3%) weakens against the USD for the sixth consecutive session, prompting the BI to comment that it is intervening in the FX market to maintain market confidence.• Brent crude oil futures continue to rise amid geopolitical developments in the Middle East; prices top $80/bbl for the first time since August, supporting oil-sensitive currencies (NOK: +0.2%).• Minneapolis Fed President Kashkari says the Fed still has "a ways to go" on reducing the size of its balance sheet, but that it will not go back to pre-COVID levels.Please refer to our latest Global Macro Strategist (A Phoenix from the Ashes?), as well as our recent publications and collaborations (Global Macro Strategy: Global FX Positioning: Positioning Turns Long USD).Developed MarketsUnited States: Market participants continued to react to Friday’s labor data, which exhibited broad-based strength, in a session that lacked fresh major catalysts. Overnight, JGB yields sold off in sympathy with USTs, while the front end cheapened further after a solid BoJ regional economic report revitalized expectations for further BoJ rate hikes.During the London session, despite weak data with softer-than-expected German 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 o