-- Commerzbank in its "European Sunrise" note of Thursday highlighted:
Markets: United States Treasuries zigzag during the Federal Reserve meeting on Wednesday, weaken in late New York session and Asia. 30-year Treasuries hit 5%. Brent briefly hits US$125/barrel, the highest since Summer 2022. The euro (EUR) falls to $1.166.
Federal Reserve votes 8-4 to hold rates. Federal Reserve Bank of Cleveland President Beth Hammack, Minneapolis Federal Reserve Bank President Neel Kashkari, Dallas Federal Reserve President Lorie Logan dissent against including easing bias in the statement, Fed Governor Stephen Miran dissents in favor of a cut.
Fed: Chair Jerome Powell sees policy stance in "very good place to wait," thinks rates are close to neutral. Economy is expanding at a solid pace, inflation "misbehaving" partly due to energy prices, Middle East adds high uncertainty.
Fed: Powell plans to stay on as governor after his term as chair ends in May, warns attacks on Fed independence are "unprecedented" and put policy credibility at risk. Treasury Secretary Scott Bessent calls this an "insult" and "violation of norms."
Iran war: President Donald Trump rejects Iran's offer to reopen the Strait of Hormuz, says blockade stays intact. Trump says Iran's economy is "crashing," says talks ongoing via phone, insists no deal will be made without agreement on no nuclear weapon (Axios). Pentagon prepares "short and powerful" strikes to break Hormuz deadlock (Axios). Bessent says "sprinting for the finish line" on Iran, willing to impose secondary sanctions on Iranian oil buyers.
Iran war: Senior Military Adviser Mohsen Rezaee says Iran won't tolerate U.S. naval blockade, warns new round of war would be "disastrous" for the U.S.
Ukraine war: President Trump suggests Russian President Vladimir Putin "might announce a little ceasefire soon."
Canada selected to host new multinational defense bank.
==EUROPE:
EU: The European Union raises its H1 funding target by 10 billion euros to 100 billion and its indicative bond issuance volume for 2026 by 20 billion euros to 180 billion euros.
Inflation: Belgium's consumer price index jumps to 4.01% year over year in April from 1.65%. Dutch HICP dips to 2.5% year over from 2.6%.