M Update Global Macro Commentary | Global February 23Morgan 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 Asia Limited+Min DaiStrategist Min.Dai@morganstanley.com +852 2239-7983 UST curves quietly flatten to local lows; ECB's Lagarde talks 4Q23 wage data; Semi-core and periphery lead European duration rally; USD ends mixed; THB lags on large Thailand trade deficit; COP weakness comes with steady downtrend in crude oil; DXY at 103.96 (+0.0%); US 10y at 4.248% (-7.3bp).• A pronounced bull-flattening of the UST curve stands out amidst a quiet NY session as the 2s10s, 2s30s, and 5s30s curves all flatten to their lowest levels since December.• ECB President Lagarde characterizes 4Q23 euro area negotiated wage data as "obviously encouraging" and stresses the ECB's independence in its sequencing of policy decisions. • European duration reverses richer, led by semi-core and the periphery; the 10y BTP-Bund spread tightens ~4bp, to 144bp, a new local low.• USD ends mixed against G10 peers, a microcosm of recent unevenness in DXY USD Index price action.• THB (-0.8%) underperform regional peers, weighed down by a large Thailand trade deficit.• COP (-0.9%) leads losses among LatAm currencies alongside a steady downtrend in crude oil prices.Please refer to our recent publications and collaborations (Government Bond Auction Pipeline: The Month Ahead; EM Fixed Income Flows Update: Where Supply Meets Demand; Podcast | Cross-Asset Conversations: US Rates; Podcast | The Global Macro Guide: February 23). The main G10 central bank event in the week ahead is the RBNZ (Feb 28) Monetary Policy Meeting. Selected scheduled G10 central bank speaking engagements include ECB Governing Council Member Vujcic (Feb 26), Kansas City Fed President Schmid (Feb 26), Riksbank Governor Thedéen (Feb 27), BoE MPC Member Mann (Feb 28), 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...
