Commerzbank on Overnight News

FINWIRES Analysis

The note captures a classic risk-on reaction to de-escalation: Brent falling, front-end Treasuries leading the rally, and the Nikkei's near-5% surge reflecting relief in energy-import-sensitive Japan. Nagel's caution that prices stay elevated tempers the dovish read, signaling the ECB won't quickly unwind tightening on a ceasefire alone. The 60-day negotiation window and unreleased agreement text leave meaningful headline risk before the Friday signing.

Key Takeaways

Risk-on de-escalation trade across rates and equities

Nagel signals ECB caution despite easing tensions

Unsigned deal leaves 60-day headline risk

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

Markets: Brent drops on United States-Iran agreement, trades just above US$83/barrel. U.S. Treasuries rally, led by the front-end. Equity futures rally, Nikkei is up almost 5%. The US dollar (USD) drops versus major currencies, while the euro (EUR) rises above $1.16.

U.S. limits international access to the latest Anthropic models. Federal judge blocks President Donald Trump's $1.8 billion payout fund.

Iran/U.S. reached an agreement to reopen the Strait of Hormuz. They plan to formally sign the agreement on Friday in Switzerland and agree to a 60-day period to negotiate the future of Iran's nuclear program. No text has been released yet.

Iran: The United Kingdom, France, Germany and Italy say they would lift sanctions if Iran curbs its nuclear program.

G7: President Trump to hold bilateral talks with French President Emmanuel Macron on Monday, bilateral meetings also scheduled with Qatar and the UAE. Japan's Prime Minister Sanae Takaichi will propose a joint rare-earth stockpile (Yomiuri).

==EUROPE:

ECB: Governing Council member Joachim Nagel says prices are likely to stay elevated even if the Iran war ends soon. He adds that the European Central Bank had to react and did it calmly.

Italy's far-right formally founds new party Futuro Nazionale.

Ukraine: The International Monetary Fund reaches staff-level agreement to release around US$690 million after review.

Switzerland: Voters reject proposal to cap population at 10 million.

Ratings: Fitch affirms ESM at AAA/stable, affirms EFSF at A+. Scope completes monitoring review of ESM/EFSF with no rating changes.

Morguard Announces $250 Million Debenture Offer and Early Redemption of Series H Senior Unsecured Debentures

Morguard (MRC.TO) agreed to issue $250 million aggregate principal amount of series J senior unsecured debentures, it said after markets closed on Thursday.The debentures will bear interest at a rate of 4.307% per year and will mature on June 18, 2029.Morningstar DBRS assigned a provisional rating of "BBB (low)" with a Stable trend.The company also said that it will redeem all of its outstanding 9.5% Series H senior unsecured debentures due Sept. 26, 2026 on June 22, 2026.The net proceeds of the offering will be used towards the early redemption of the 2023 debentures and for general corporate purposes, it added."The redemption price will be paid in cash and is approximately $1,014.753 per $1,000 principal amount of 2023 Debentures, together with accrued and unpaid interest on the 2023 Debentures up to, but excluding, the Redemption Date," said the company.The company's shares were last seen up $1.00 at $122.00 on the Toronto Stock Exchange.Price: $122.00, Change: $+1.00, Percent Change: +0.83%

$MRC.TO

Japan Gold Announces US$1 Million Convertible Debenture Financing; Shares up 5.8%

Japan Gold (JG.V) on Friday said it will raise US$1 million from a private placement of unsecured convertible debenture for gross proceeds of US$1 million to Equinox Partners Investment Management, a strategic investor and major shareholder of the company.The three-year debenture bears an interest rate of 10% per year, accruing daily but payable in cash only at the maturity date, on the occurrence of an event of default or upon an early redemption, stated the company.The company will have the right, at its option, to make an early redemption in cash of all or any part of the principal amount together with payment of any accrued but unpaid interest, said the company."In addition, the company will have the right, at its election, to satisfy its obligation to pay cash to the debenture holder through the delivery of common shares of the company in lieu of cash, at a price per share which equals the greater of: (i) the most recent market price of the shares on the TSX Venture Exchange on the date that the accrued interest becomes payable; (ii) $0.11; and (iii) a price per security or conversion price of debt securities in a future financing event," stated the company.The net proceeds will be used for general working capital purposes, said the company.Equinox holds a 29.32% stake in Japan Gold.The company's shares were last seen up C$0.005 to C$0.09 on the TSX Venture Exchange.

$JG.V