Morgan Stanley has turned cautious on some emerging market sovereigns, arguing that a Fed rate cut is unlikely to spur large inflows into bond funds. Strategists such as Simon Waever have advised investors to be bearish on the asset class in the short term, boost cash levels in their portfolios, focus on investment-grade bonds rather than riskier ones, or sell emerging market credit default swaps. According to a report published on Monday, the bank removed Nigerian, Argentine and Moroccan bonds from a basket of preferred bonds and included Mexican and Romanian bonds that have become "cheaper". Its forecast is partly influenced by expectations of a soft landing in the US interest rate market, which is already digesting the economy. " Further declines in Treasury yields could be detrimental to risk appetite, "they said." It can take up to 12 months after the first rate cut to shift money from money market funds to risk assets. "