M Update Global Macro Commentary | Global February 14Morgan 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 & 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+Min DaiStrategist Min.Dai@morganstanley.com +852 2239-7983 USTs bull-steepen, partially retrace post-CPI sell-off; UK gilts bull-steepen on below-consensus CPI; BoE's Bailey says inflation outlook largely unchanged; USD/JPY eases lower after MoF verbal intervention; NOK gains amid risk recovery; BRL lags; DXY at 104.71 (-0.2%); US 10y at 4.255% (-5.9bp).• USTs bull-steepen and partially retrace the prior session's sell-off, aided by a view from Chicago Fed President Goolsbee that the same low inflation prints are "likely too stringent a bar."• UK gilts bull-steepen and outperform on a cross-market basis after CPI comes in below consensus expectations and BoE forecasts.• BoE Governor Bailey comments on "quite a marked reduction in pay growth," in reference to January wage data, but says the MPC's inflation outlook is largely unchanged.• USD/JPY (-0.2%) eases lower after a Japanese MoF official describes recent FX moves as "rapid" and says they are watching FX markets with a "high level of urgency."• NOK outperforms amid a broad recovery in risk appetite and above-consensus 4Q23 Norwegian GDP.• BRL (-0.4%) ends lower after catching up peer moves after markets were closed for a holiday. Please refer to our recent publications and collaborations (UK Inflation Watch: Weighing the Details; Global Macro Strategy: G10 FX Chart Pack; EM Strategy Update: Government Announces Further Pemex Cashflow Relief; Ghana Sovereign Credit Strategy: See Minor Downside Risks to Debt Restructuring Negotiations).Developed MarketsUnited States: G4 rates bull-steepened and partially retraced the pronounced post-CPI sell-off. UK gilts outperformed on a cross-market basis, following below-consensus January CPI data. Yet, BoE Governor Bailey did state the MPC’s inflation outlook was largely unchanged, given the robust December data. US Treasuries followed, through a downward revision to December PPI data, and amid comments from Chicago Fed President Goolsbee. He stressed the same low-inflation prints (prior to January) are “likely too stringent a bar” for the Fed to gain confidence inflation is on a sustainable path back to 2%. Goolsbee also emphasized the current stance of policy is “quite restrictive.” The focus in G10 FX overnight was on the return of ver...
