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Commerzbank on Overnight News

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

Markets: United States Treasuries decline, then turn sideways in Asia. Asian stocks mixed while e-minis recover. The euro (EUR) weakens. Brent hovers around US$93/barrel.

Fed: Federal Reserve Governor Jerome Powell sees risk for Fed credibility if any president were free to dismiss Fed officials over policy disagreement. Federal Reserve Vice Chair for Supervision Michelle Bowman says it is too soon to judge the inflationary impact of the Iran war.

AI: Federal Reserve Bank of New York President John Williams says "demand for macro economists will still be vibrant."

Iran war: President Donald Trump urges calm on Iran deal, says "it will all work out well," after he sends tougher terms to Iran for peace framework, and says most of the deal is about the nuclear program. Iran is preparing counter-proposals to the U.S. draft framework and rejected suggestions it is close to accepting Trump's terms. The U.S. military strikes Iranian radar and drone control sites after Iran shot down a U.S. drone.

==EUROPE:

ECB: Governing Council member (GC) Isabel Schnabel says risk of de-anchoring inflation expectations is rising and the European Central Bank can no longer "look through" energy shock. GC member Alvaro Santos Pereira urges the ECB to act sooner rather than later.

ECB: Schnabel says stablecoins can trigger runs and fire sales, argues in favor of CBDC (speech).

BoE: Bank of England policymaker Catherine Mann warns the "good luck" of Great Moderation has run out.

Germany: Government so far failed to meet targets for the special fund for infrastructure, as 24 billion euros were disbursed in 2025 versus the 37.2 billion euros plan, and only 26 of 109 milestones planned for 2026 have been achieved by May (HB). Hendrik Wust calls speculation he will replace Prime Minister Friedrich Merz "nonsense."

EU: German Finance Minister Lars Klingbeil says Capital Markets Union is a game-changer for securing increased investment, after the six largest nations agree on plan to implement CMU. Germany wants EU-wide deal on CMU plan by year-end.

Ratings: S&P conducted an annual review for France without rating changes. DBRS confirms Spain at A (high)/stable. S&P affirms Latvia and Lithuania at A/stable. Scope affirms Bulgaria at A-/stable.

SoftBank plans 75 billion euros of Artificial Intelligence (AI) investments in France.

==ASIA:

China: Manufacturing PMI slips to 50 as expected, service PMI improves more than expected to 50.1. RatingDog manufacturing PMI falls less than expected.

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Canada's Weak Q1 GDP, Softer Domestic Demand Put Growth Risks in Focus, Says Nomura

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SocGen's Overnight Economic News Summary

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Market Chatter: Canada Could Double Its Exports to China, Minister Says in Rare Visit to Ottawa

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