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Commerzbank on Overnight News

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Commerzbank in its "European Sunrise" note of Thursday highlighted:

Markets: United States Treasuries better supported in the late New York session and Asia. New 30-year U.S. Treasury auction awarded at above 5% yield for the first time since 2007, yet demand was subdued. U.S./European equity futures are up. Brent declines, trades around US$106/barrel. Japanese government bonds bear-steepen with 30-year yields rising to the highest level since 1999.

Fed: Kevin Warsh is confirmed as Federal Reserve chair in a 54-45 Senate vote.

Fed: Federal Reserve Bank of Boston President Susan Collins argues that rates should remain on hold for "some time." Minneapolis Fed President Neel Kashkari says the labor market is "lukewarm" and moving sideways.

U.S./China: President Donald Trump says the relationship will be better than ever before. President Xi Jinping says China/U.S. should be partners, not rivals. Warns of clashes if the Taiwan issue is mishandled. Secretary of State Marco Rubio wants China to get Iran to "walk away from what they are doing" in the Persian Gulf.

==EUROPE:

ECB: The European Central Bank is expected to hike in June and once more this year (Reuters poll). Governing Council (GC) member Philip Lane calls monetary policy stance a "judgment call" given current complex conditions; argues that fallout on growth and inflation will tip the scale. GC member Martins Kazaks cannot yet see full impact of the Iran war on inflation; says the situation is a bit worse than the baseline scenario.

Germany: Governing coalition agreed to reduce subsidies by three billion euros to create fiscal space (Bloomberg sources).

BoE: The Bank of England is expected to hold rates steady at 3.75% this year (Reuters poll).

==ASIA:

Japan: Bank of Japan's new board member, Kazuyuki Masu, says hike is desirable at "earliest stage possible."

Japan is considering extra budget for fiscal 2026 to help households deal with rising energy costs (Kyodo sources).

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Canada's Wholesale Trade Rise a Tad Better Than Expected in March, says StatsCan

Canadian wholesale sales, excluding oil, oil products, and other hydrocarbons and excluding oilseed and grain, rose 1.9% month over month to $89.0 billion in March, said the country's statistical agency on Thursday.March's rise was slightly better than the 1.3% month-over-month consensus figure provided by Scotiabank.Sales increased in five of the seven subsectors, representing 79.6% of total wholesale sales, noted Statistics Canada in a statement. The largest increase came from the machinery, equipment and supplies subsector.Wholesale sales were 3.3% higher in March than in the same month one year earlier.In volume terms, wholesale sales excluding oil, oil products, and other hydrocarbons and excluding oilseed and grain increased 1.7% month over month in March.Wholesale inventories, excluding oil, oil products, and other hydrocarbons and excluding oilseed and grain, increased by 0.3% month over month to $137.2 billion in March, pointed out StatsCan.Inventories rose in three of the seven subsectors in March, with the largest increases occurring in the machinery, equipment and supplies subsector (2.0% to $41.4 billion) and the food, beverage and tobacco subsector (0.5% to $15.6 billion).The inventory-to-sales ratio decreased from 1.57 in February to 1.54 in March. This ratio measures the number of months required to exhaust inventories if sales remain at their current levels.

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Brief: Canada's Wholesale Trade Up 1.9% M/M in March; Scotiabank Says Consensus Saw 1.3% M/M Gain

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BMO on The Day Ahead in Canada

Canada will release March wholesale trade and new vehicle sales figures at 8:30 a.m. ET on Thursday, with the former expected to rise 1.5% month over month while the latter could decline 8.0% yeat over year, said Bank of Montreal (BMO).Released earlier Thursday, Canada's existing home sales rose 0.7% month over month in April, the first advance in six months, though still down 4% in the past year and 10% below the decade norm for the month, noted the bank after data from the Canadian Real Estate Association (CREA) released.New listings outpaced sales, lowering the sales/listings ratio to 45.6%, on the edge of sellers' market territory.Consequently, benchmark prices slipped a further 0.1% in the month and are down 4.2% year over year. Southwestern Ontario and parts of British Columbia remain the national weak spots, though Alberta is also slipping.These regional markets are likely to remain soft for a while and more so if the Bank of Canada pulls the tightening trigger, added BMO.

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