M Update Global Macro Commentary | Global February 16Morgan Stanley & Co. LLCMartin W Tobias, CFAStrategist Martin.Tobias@morganstanley.com +1 212 761-6076 Zoe K StraussStrategist Zoe.Strauss@morganstanley.com +1 212 761-0407 Eli P CarterStrategist Eli.Carter@morganstanley.com +1 212 761-4703 Lenoy DujonUS/Canada Economist Lenoy.Dujon@morganstanley.com +1 212 761-2779 Morgan Stanley MUFG Securities Co., Ltd.+Koichi SugisakiStrategist Koichi.Sugisaki@morganstanleymufg.com +81 3 6836-8428 Morgan Stanley Asia Limited+Min DaiStrategist Min.Dai@morganstanley.com +852 2239-7983 Strong US PPI drives UST bear-flattener; GBP finishes mixed; JGBs twist flatten after liquidity tap auction; 10y BTP-Bund spread continues to tighten; CLP losses persist; Fed's Bostic says policy decisions can be made "without oppressive urgency"; DXY at 104.28 (-0.0%); US 10y at 4.279% (+4.9bp).• January US PPI strength with a strong translation to core PCE drives a sharp UST bear-flattener.• GBP shrugs off a significant upside surprise in January UK retail sales that show the impact of seasonal adjustments, following the weak December data.• JGBs twist flatten after a strong liquidity tap auction drives market participants to square long-end short positions.• European curves flatten, with underperformance in the front-end; the 10y BTP-Bund spread tightens another 1.5bp to 148bp, a new local low.• CLP (-0.4%) losses against USD continue as risk appetite wanes into the close.• Atlanta Fed President Bostic says "we will likely soon contemplate the appropriate time for monetary policy to become less restrictive. Right now, a strong labor market and macroeconomy offer the chance to execute these policy decisions without oppressive urgency."The next Global Macro Commentary will be published on Tuesday, February 20. Please refer to our recent publications and collaborations (Government Bond Auction Pipeline: The Month Ahead; G10 FX Strategy: The Hedge of Reason; Senegal Sovereign Credit Strategy: The Dakar Rally; EM Fixed Income Flows Update: Where Supply Meets Demand; Podcast | The Global Macro Guide: February 16). The main G10 central bank events in the week ahead are release of Minutes from the February RBA (Feb 20) and January FOMC (Feb 21) meetings as well as Accounts 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, refer to the Disclosure Section, located at the end of this report.+= Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to FINR...
