Commerzbank in its "European Sunrise" note of Tuesday highlighted:
Markets: United States Treasury futures reverse Monday's rally, 10-year yields near 4.5%. E-minis weaken from record highs. Brent falls below US$100/barrel, hovers sideways around US$98/barrel. The US dollar (USD) is "modestly" supported.
Fed: Kevin Warsh sworn in as Federal Reserve chair, unanimously selected by FOMC. He says he will lead a "reform-oriented Fed," pledges inflation can be lower "with independence and resolve." President Donald Trump says Warsh will curtail Fed practice of forward guidance, calls on him to be "totally independent" and "do his own thing."
Iran war: The U.S and Iran have developed a "framework" to extend the ceasefire by 60 days, reopen the Strait of Hormuz in exchange for lifting the U.S. blockade of Iranian ports and Iran being free to sell oil. Negotiations on curbing Iran's nuclear program to follow within 30 to 60 days (FT, NYT, Axios). Iran agrees in principle to give up enriched uranium (NYT) but demands it be transferred to China (Al Arabiya). Trump says enriched uranium will preferably be destroyed in Iran. He is "50/50" on deal or bombs, later says agreement "nearly done" and deal to be announced shortly," before walking back saying he told officials not to rush; deal will be "exact opposite" of 2015 Joint Comprehensive Plan of Action (JCPOA).
U.S./Iran: The U.S. and Israel strike missile launch sites and boats. The U.S. says it continues to use "restraint" during the ongoing ceasefire.
==EUROPE:
ECB: President Christine Lagarde says the situation is too uncertain to commit on rates, the European Central Bank to look at all data to assess the economy in June. Inflation projections likely to be revised. Governing Council (GC) member Madis Muller sees "good case" for June hike on energy surge. GC member Yannis Stournaras says a hike may be inevitable to keep credibility, sees inflation as "sticky." GC member Martin Kocher sees pressure to hike, unless the Iran situation improves. GC member Isabel Schnabel says ECB should raise rates even if peace deal is struck.
ECB plans to summon banks on Tuesday to discuss cyber-security flaws exposed by Artificial Intelligence model "Mythos" (FT).
EU: The International Monetary Fund says European Union energy, defense and innovation should be financed via joint debt (FAZ cites paper discussed at last week's Eurogroup).
France: Far-right RN President Jordan Bardella would beat Edouard Philippe by 52-48% in presidential runoff (Odoxa poll).
Ratings: Fitch affirms Belgium at A+/stable. DBRS confirms Slovenia at AA (low)/stable. Scope downgrades Slovakia to A-/stable from A/negative, affirms NRW at AAA/stable, and China at A/stable.
U.K.: British Finance Minister Rachel Reeves eyes 22% charge on interest earned from cash (Telegraph sources).
==ASIA:
Japan: Prime Minister Sanae Takaichi says extra budget spending will be just over three trillion yen, won't increase bond issuance on a calendar basis.