Morgan Stanley Fixed-Global Macro Commentary July 1-108968373

MUpdateGlobalMacroCommentary|NorthAmericaJuly1MorganStanley&Co.LLCAlexandraMaierStrategistAlexandra.Maier@morganstanley.com+1212761-0428MorganStanley&Co.Internationalplc+DominicJKrummenacherStrategistDominic.Krummenacher@morganstanley.com+44207425-9781MorganStanley&Co.LLCLenoyDujonUS/CanadaEconomistLenoy.Dujon@morganstanley.com+1212761-2779MorganStanley&Co.Internationalplc+LorenzoTestaStrategistLorenzo.Testa@morganstanley.com+44207677-0337MorganStanleyMUFGSecuritiesCo.,Ltd.+HirokiYagiResearchAssociateHiroki.Yagi1@morganstanleymufg.com+8136836-5412USTsbear-steepenamidelectionuncertainty;weakISMdataprovidebriefrelieftosell-off;risk-onmoveinEuropeafterFrenchelections;ECB'sLagardepushesbackonJulycut;BoJTankanSurveyshowssolidresults;PBoCannouncesbondpurchases;DXYat105.83(-0.0%);US10yat4.461%(+6.5bp).•USTscontinuetobear-steepenontheneedforhighertermpremiumamidcontinueduncertaintysurroundingtheUSelection,withmarketparticipantspricinginfiscalconcernsandhigherinflationgivenpotentialelectionoutcomes.•USISMManufacturingdatacomeinsofterthanexpected,withnotabledeclineinthePricesPaidIndex,whichprovidestemporaryrelieftothebear-steepeningmoveinUSTs.•Risk-onmoveinEuropesupportsasell-offinBunds(10yBund:+11bp),reboundinEuropeanstocks(EuroStoxx:+0.7%),andstrengtheningoftheEUR(+0.3%)asmarketparticipantsdigesttheoutcomeofthefir...