Morgan Stanley Fixed-Global Macro Commentary October 15-110843885

M Update Global Macro Commentary | Global October 15Morgan 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.+Hiromu UezatoResearch Associate Hiromu.Uezato@morganstanleymufg.com +81 3 6836-8431 Morgan Stanley & Co. International plc+David CuevaStrategist David.Cueva@morganstanley.com +44 20 7425-2143 Morgan Stanley & Co. LLCHeather BergerEconomist Heather.Berger@morganstanley.com +1 212 761-2296 Softer-than-expected Canadian CPI; USTs bull-flatten; gilts rally after UK labor data; Fed's Daly says the Fed must remain "vigilant"; AUD falls due to deterioration in sentiment on China-related assets; India rates rally despite strong local CPI; DXY at 103.22 (0.3%); US 10y at 4.032% (-6.9bp).• Canadian bonds rally across the curve (2y: -6bp; 10y: -8bp) on soft September inflation, with the annualized 3-month moving average of CPI trim and median falling to 2.1% (P: 2.3%). • USTs bull-flatten as rate expectations keep the front end anchored, while the long end rallies (30y: -9bp) alongside a drop in oil prices (Brent crude oil futures: -4.1%) as geopolitical risks in the Middle East ease to an extent.• Gilts bull-flatten (30y: -10bp) ahead of UK CPI data and following in-line UK labor data showing the UK economy generated no jobs and produced and next to no pay growth beyond the minimum wage hike.• San Francisco Fed President Daly says the Fed must remain “vigilant and be intentional” in balancing both of the Fed’s mandates, adding she is cautiously optimistic on the US economy.• AUD falls -0.4%, weighed down by a deterioration in sentiment on China-related assets following reports that suggest the recent stimulus measures were aimed at stabilizing the overall economy and not a sign of more active stimulus to come. • India rates rally after an upside surprise in September CPI that was driven by a sharp acceleration in food prices is offset by the fall in oil prices.Please refer to our recent publications and collaborations (G10 FX Strategy: The Fault in R-Stars; Global Macro Strategy: Global FX Positioning: Investors Increase Short CAD Exposure; EM Sovereign Credit Strategy: The IMF 'Cuts' Interest Rates; Turkey Economics, Banks and Strategy: Turkey Trip Notes: Navigating the Trade-offs).Developed MarketsUnited States: After a long holiday weekend, the UST curve opened lower following a downward revision to the final French September CPI and soft UK labor data. The UST curve 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 disclosures,