Commerzbank on Overnight News

06:35 AM EDT, 05/20/2026 (MT Newswires) -- Commerzbank in its "European Sunrise" note of Wednesday highlighted:

Markets: United States Treasury yields remain close to the highs in the late New York session, front-end slightly better supported in Asia. Japanese government bond curve flattens from both sides after strong 20-year auction. Equity futures slide, led by Japan. The euro (EUR) trades close to $1.16. Brent at US$110.5/barrel.

Fed: Federal Reserve Bank of Philadelphia President Anna Paulson says rate cuts require progress on inflation. New York Fed System Open Market Account Manager Roberto Perli says T-bill purchases can be adjusted "up or down [...] to maintain reserves within the ample range."

U.S.: Senate advances resolution to limit military action in Iran with unexpected support from a Republican senator.

NATO: U.S. plans to reduce forces available to help Europe during crisis (Reuters).

Russia-Ukraine war: Euroepan Union mulls Mario Draghi or Angela Merkel to negotiate with Russian President Vladimir Putin (FT).

==EUROPE:

ECB: European Central Bank Governing Council(GC) member Martin Kocher expects a June hike if there is no progress on the Iran war and the opening of the Strait of Hormuz. GC member Fabio Panetta sees the world faced with both energy and Artificial Intelligence shock.

EU finalizes text of long-delayed U.S. trade deal, clearing the way for ratification before President Donald Trump's deadline.

Germany is the "epicenter of second China shock" according to the CER study "China Shock 2.0" (HB).

U.K.: Government urges supermarkets to voluntarily cap some food prices in return for lifting regulations (FT). Separately, the United Kingdom eases sanctions on fuels from Russian crude.

==ASIA:

Japan: The central bank (BoJ) isn't ruling out a pause or slowdown in bond taper (Reuters sources).

China leaves one- and five-year LPR unchanged, as expected.

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