Morgan Stanley Fixed-Global Macro Commentary August 12-109821337(1)

MUpdateGlobalMacroCommentary|NorthAmericaAugust12MorganStanley&Co.LLCAlexandraMaierStrategistAlexandra.Maier@morganstanley.com+1212761-0428MorganStanley&Co.Internationalplc+DominicJKrummenacherStrategistDominic.Krummenacher@morganstanley.com+44207425-9781MorganStanley&Co.LLCLenoyDujonUS/CanadaEconomistLenoy.Dujon@morganstanley.com+1212761-2779MorganStanleyAsiaLimited+GekTengKhooStrategistGek.Teng.Khoo@morganstanley.com+8523963-0303JPYweakensinapartialreversalofpriorvolatility;USTsrallyamidrisk-offsentiment;Fed'sBowmanflagsupsideriskstoinflation;CGBsselloffafterPBoC'swarning;giltsandGBPremainstable;oilpricesriseamidgeopoliticaltensions;DXYat103.23(-0.0%);US10yat3.904%(-3.6bp).•Despitealocalholiday,JPYweakensasmuchas1.0%intradayinapartialreversalofthevolatilecarrytradeunwindsfromlastweek;USD/JPYultimatelygains0.4%.•USTsrallyledbythebellyofthecurveinadata-sparsesessionamidarisk-offsentimentgivenheightenedgeopoliticaltensions.•FedGovernorBowmanflagsupsideriskstoinflationasaresultofgeopoliticalfactorsandpersistenthousingservicesduetoincreasedimmigration;shecautionstheFedshouldnotoverreacttoasingledatapoint,addingtheriseinunemploymentmaybe“exaggerating”labormarketweakness.•Chinaratesunderperformwith10yCGBsrising4bpafterthePBoChighlightsthat10yCGBs,whichhavefallentoa20-yearlow,havedeviatedfromareasonablelevela...