Morgan_Stanley_Fixed-Global_Macro_Commentary_January_30-113178242_23页_928kb

Global Macro Commentary - Morgan Stanley (January 30, 2025)

Key Event: Tariff uncertainty persists ahead of February 1st, with reports President Trump considering 25% tariffs on Canada and Mexico, affecting CAD and MXN valuations.

Central Bank Updates:

• ECB cuts rates by 25bps, maintains restrictive rates narrative, signaling more easing. Bunds and Eurozone bonds rally due to downward re-pricing.
• South Africa cuts rates by 25bps, but hawkish vote split suggests cautious policy pivot.
• US GDP: Q4 2024 Q/Q at 2.3% (surpassed by consumption surge at +4.2%). Core PCE slightly below expectations.

Asset Price Action:

• Rates: 10yr US yields unchanged at ~4.516% (-1.2bps); G4 rates show correlated moves with ECB influence driving European duration easing and Bund bull steepening.
• FX: USD/JPY weakens amid BoJ messaging; EUR/USD bears control the market; ZAR gains post-SARB meeting; Gold hits fresh highs (US$2794.59) due to safe-haven demand.
• Equities: S&P 500 gains ~0.5% amid strong US consumer data, but late tariff news cuts gains. Emerging market equities mixed.

Market Sentiment/Strategy:

• G4 10yr Smarter Trading Strategy: Redefined momentum strategy improves returns vs. traditional indices, combining both long positions and short position fades.
• Holiday Trading Model: December strategy outperforms since 1987, incorporating pre/post-holiday patterns in US Treasuries.

Downside Risks:

• Eurozone GDP (Germany, France) underestimation to -0.2% q/q from -0.1% prior, questioning ECB outlook.
• US labor market strength complicating Fed policy path.
• Broader G10 volatility could amplify portfolio risks, e.g., via JPY carry trade unwinds.

Disclosure: Research is influenced by client transactions; conflicts pose a risk to independence (Morgan Stanley client relationships include underwriting services or market-making).