M Update Global Macro Commentary | Global February 7Morgan Stanley & Co. LLCMartin W Tobias, CFAStrategist Martin.Tobias@morganstanley.com +1 212 761-6076 Morgan Stanley & Co. International plc+Dominic J KrummenacherStrategist Dominic.Krummenacher@morganstanley.com +44 20 7425-9781 Morgan Stanley & Co. LLCEli P CarterStrategist Eli.Carter@morganstanley.com +1 212 761-4703 Lenoy DujonUS/Canada Economist Lenoy.Dujon@morganstanley.com +1 212 761-2779 Morgan Stanley & Co. International plc+Marie-Anais C FrancoisStrategist Marie-Anais.Francois@morganstanley.com +44 20 7425-1877 Morgan Stanley MUFG Securities Co., Ltd.+Koichi SugisakiStrategist Koichi.Sugisaki@morganstanleymufg.com +81 3 6836-8428 Morgan Stanley Asia Limited+Gek Teng KhooStrategist Gek.Teng.Khoo@morganstanley.com +852 3963-0303 Solid 10y auction snaps long-end UST underperformance; Riksbank's Jansson contextualizes March cut; European duration trades rangebound; SNB FX reserves increase, CHF weakens; CLP lags amid copper losses; USD/JPY is muted before BoJ's Uchida; DXY at 104.06 (-0.2%); US 10y at 4.121% (+2.1bp).• US Treasuries retreat from session highs ahead of the $42bn 10y UST auction, the largest on record, but supply concerns abate after the auction comes 1.2bp through.• Riksbank Deputy Governor Jansson believes "a first policy-rate cut as early as in March is something that I currently do not consider impossible but nor do I think it is particularly probable."• Peripheral spreads widen marginally in a rangebound session for European duration.• CHF exhibits broad weakness after SNB FX reserves increase, which market participants interpret as a signal the SNB targeted CHF weakness and bought FX in January.• CLP (-0.5%) lags LatAm peers against USD alongside a downturn in copper futures prices.• USD/JPY (+0.2%) trades in a choppy manner before a speech by BoJ Deputy Governor Uchida.Please refer to our latest Insight (New NISAs) as well as our recent publications and collaborations (CEEMEA Sovereign Credit Strategy: High Yield Near-Term Catalysts; EM Sovereign Credit Strategy: Rich & Cheap Watch).Developed MarketsUnited States: Risk markets trotted into the middle of the week with a modest risk-on tone. Mild gains of G10 risk-sensitive currencies came in contrast to modest weakness in safe havens, aside for CHF, which exhibited broad-based depreciation.Global equity performance varied as European bourses flashed slightly in the red. Optimism around China A-shares equities persisted, with notable outperformance in small caps. Although S&P 500 E-Minis settled above 5,000, the cash index was unable to breach this psychological level as the S&P 500 (+0.82%) intraday high ticked at 4999.89 intraday. Absent first-tier economic data releases in the NY morning, US Treasury market Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware...
