05:45 AM EST, 02/20/2025 (MT Newswires) -- Commerzbank in its "European Sunrise" note of Thursday highlighted:

Markets: United States Treasuries rally on Federal Reserve minutes, remain bid in Asia. S&P closes at record high after Fed minutes before e-minis erase gains. EUR rises moderately to $1.043. Brent drops below $76/barrel.

Fed: January Minutes show that many participants prefer UST purchases in maturities in line with outstanding stock when quantitative tightening ends, consider "pausing or slowing balance sheet runoff" amid concerns about the debt ceiling. Regarding rates, "many participants noted that the committee could hold the policy rate at a restrictive level if the economy remained strong and inflation remained elevated."

Fed: Federal Reserve Vice Chairman Philip Jefferson says additional cuts can take some time as the economy remains strong. Atlanta Fed President Raphael Bostic notes that some of President Donald Trump's policies may be inflationary.

U.S.: President Trump tells Pentagon to plan for 8% budget cut. He also plans an executive order requiring agencies to review all regulations to ensure alignment with the administration's policies. Furthermore, Trump indicates that a new trade deal with China is possible, plans to extend tax cuts and says that a balanced budget may come this year or next year.

==EUROPE:

EU: The United Kingdom and France are said to be drafting plans for a "reassurance force" to be deployed in Ukraine after a potential ceasefire, contingent on U.S. protection. The European Union is ready to discuss lower tariffs on autos and other goods with the U.S. French President Emmanuel Macron to visit the U.S. next week.

France: Prime Minister Francois Bayrou survives no-confidence vote about remarks on migration.

Germany: Conservative opposition leader Friedrich Merz insists on cost-cutting efforts to increase defense spending but is also open to reforming the debt brake.

==ASIA:

China: The central bank (PBoC) keeps one- and five-year LPR unchanged at 3.1% and 3.6%, respectively.