06:10 AM EST, 02/04/2025 (MT Newswires) -- Commerzbank in its "European Sunrise" note of Tuesday highlighted:

Markets: Tariff volatility continues. United States Treasury futures slip back close to Friday's lows, equities recover unevenly, US dollar softens, oil is weaker.

Tariffs: U.S. President Donald Trump agrees to delay 25% tariffs on Canada and Mexico for one month after both countries agree to take tougher measures to combat migration and drug trafficking. 10% tariffs on China come into effect but Trump wanted to speak to Chinese President Xi Jinping "probably over the next 24 hours." China announces new tariffs on U.S. products, adds U.S. firms to unreliable entities list, probes Google, restricts exports of tungsten materials. European Commission (EC) President Ursula Von der Leyen wants to be "very pragmatic, engage early, and discuss and debate" with Trump.

Fed: Atlanta Federal Reserve President Raphael Bostic thinks the Fed might wait "for a while", sees nominal neutral rate at 3%-3.5%. Chicago Federal Reserve President Austan Goolsbee says the Fed should proceed with more caution "because there are risks that inflation is about to start kicking back up again" due to tariffs. Federal Reserve Bank of Boston President Susan Collins says the Fed could "look through" initial inflation hit if expectations remain well-anchored.

U.S.: Trump signs executive action to create sovereign wealth fund, says he has "great interest" in Tiktok. On Russia/Ukraine he says he made "a lot of progress," demands a rare-earths deal with Ukraine in return for military support. He will hold a press conference with Israeli Prime Minister Benjamin Netanyahu on Tuesday.

US Treasury reduces Q1 borrowing estimate by $9 billion to $815 billion, expects $123 billion borrowing in Q2.

==EUROPE:

EU: The European Union explores ways to create more fiscal space for the significant increase in defense spending. Geman PM Olaf Scholz speaks out against new joint debt, Finland's PM Petteri Orpo is "open". The EC will publish guidance on AI on Tuesday despite Trump's warnings (FT).